Mutual funds bet on these midcap, smallcap stocks last month

In the month of July, Mutual Funds (MFs) top stock additions included Maruti Suzuki, Kotak Mahindra Bank, Tata Motors and HDFC Life Insurance, whereas they slightly trimmed holdings in HDFC Ltd, ITC, SBI Life Insurance, and Larsen and Toubro (L&T), as per data analysed by brokerage and research firm Edelweiss.

Key midcap stocks additions by the mutual fund houses were Zomato, Gland Pharma, Indian Hotels and Hindustan Petroleum Corporation Ltd (HPCL) whereas key reductions in the midcaps segment were Polycab India, PVR, KEI Industries, and L&T Tech. 

Meanwhile, smallcap stocks like Sapphire Foods, Granules India and Sobha were their top buys whereas key reductions included Birlasoft, Metropolis Health, Indiabulls Housing Finance and GHCL, showed the brokerage data on monthly activity by MFs.

Equity mutual funds attracted 8,898 crore in July, a 43% decline compared to the preceding month as markets continued to remain volatile amid concerns over inflation and rate hike expectations. For the 17th straight month, equity mutual funds witnessed inflows in July. Within the equity segment, small-cap schemes witnessed a significant inflow of 1,779 crore, followed by flexi-cap and mid-cap segments.

Overall, the mutual fund industry registered a net inflow of 23,605 crore in July compared to a net withdrawal of 69,853 crore in June. This was mainly on account of higher levels of redemptions from debt mutual funds. The inflow pushed the Assets Under Management (AUM) of the industry to 37.75 lakh crore at the end of July from 35.64 lakh crore at the end of June.

The number of systematic investment plan (SIP) accounts stood at a record 56.1 million as of July end, while monthly SIP contribution remained robust at 12,140 crore.

BSE’s benchmark Sensex surged 9% in July as foreign portfolio investors turned net buyers of Indian stocks after nine months. The Nifty, after three consecutive months of decline, bounced back smartly in July 2022 with 8.7% MoM gain, the highest since December 2020. FIIs registered inflows of $0.8 billion in July after nine months of outflows. Domestic inflows decelerated to $1.3 billion in the previous month.

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