Chemical companies find favor with mutual fund managers in March
Record inflows into equity mutual funds in March appeared to give fund managers carte blanche as they add new themes to their portfolios, particularly in the area of chemicals.
According to IDBI Capital, fund managers bought shares of Gulshan Polyols (organic fructose, sorbitol and various industrial chemicals company), Oriental Aromatics (aromatic chemicals and camphor), Rossell India (tea, aerospace and defense) , HLE Glascoat (process equipment for the chemical and pharmaceutical industries), RattanIndia Enterprises (electric mobility) and India Grid (power infrastructure).
With these new additions, MF holdings of chemical stocks rose to ₹31,039 crore, up 12% month-on-month. According to IDBI Capital, sectors such as paper, media and entertainment, and services saw a higher increase (than chemicals) in the asset base. But the increase was mainly due to a sharp increase in the share price.
Higher net entries
Systematic investment plans continued to rise and reached a record high of ₹12,328 crore in March 2022 as investors poured in money.
“Net inflows have been higher over the past four months at lower market levels. Over the past few years, each sharp market drop has resulted in increased inflows, indicating the maturity of retail investors,” said said ICICI Securities in a report.
Inflows (ex-NFO) into equity funds continue to hit a record high of ₹20,300 crore in March 2022 from ₹17,800 crore in February 2022, it added.
According to IDBI Capital, MFs left Sahajanand Medical, Eureka Forbes, Godawari Power, S Chand and Co, J&K Bank, Asian Granito, MSTC, Future Retail and National Fertilizers.
Among equity funds, the multi-cap fund category leads the inflow chart with ₹9,695 crore, followed by large caps (₹3,052 crore), flexi-caps (₹2,549 crore), mid caps (₹2,193 crore) and small caps. caps (₹1,696 crore). The Equity Linked Savings Scheme or ELSS saw an inflow of ₹2,613 crore due to investors’ year-end tax saving plans.
Among large caps, Vedanta, Indus Towers, Hindustan Zinc, SAIL, Godrej Consumer, Ambuja Cements, ONGC, HDFC Life Insurance, PB Fintech and L&T Infotech were top picks for fund managers, ICICI Securities said. IRCTC, UPL, JSW Steel, HDFC Asset Management Company, Adani Green Energy, Berger Paints, Indian Oil Corporation, Hindalco, Adani Transmission and ITC were the top large-cap sells.
The top 5 picks among mid cap companies were GMR Infrastructure, Coforge, Biocon, Sundaram Finance, Star Health and Allied Insurance, and the top sellers were L&T Finance Holdings, Vodafone Idea, Union Bank of India, Nalco and Godrej Industries.
Mutual funds were net buyers worth ₹22,499 crore in March from ₹28,180 crore in February.
April 14, 2022