 "Chart view: Stocks most bought and sold by mutual funds in last 5 months")
Cash levels for large and mid-cap schemes have already dropped to February 2022 lows, while small-cap cash levels are dropping sharply and now marginally below the long-term average, according to data analysed by brokerage Elara Securities.
However, the cash remains concentrated in a few bigger schemes where deployment has finally begun.
However, the cash remains concentrated in a few bigger schemes where deployment has finally begun.
Smallcap schemes witnessed biggest drop in cash levels from 7.2 per cent in Nov ’23 to 6 per cent in Dec ’23. The big underperformance on back of cash call has started resulting in a deployment leg in the smallcap space.
Smallcap schemes were heavily invested in largecap names. This was also an additional reason for underperformance.
"Finally, we saw biggest drop in largecap holding in smallcap schemes since Dec ’21," the report said.
Many of the large-size mutual fund schemes were running on big cash through most of CY2023, resulting in big underperformance.
“We are finally seeing panic and forced deployment beginning across many of those schemes. This is visible across the board, but more prominently in the smallcap space”, Elara Securities said in a report.
Many of the names are laggards and did not participate aggressively in last year's rally, the report said.
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Largest deployment across categories- Names where the biggest liquidity has been deployed in Dec’23
As seen in the above table, Mankind Pharma, RIL, One97 Communications, Sun Pharma, SBI, Infosys, Kotak Mahindra Bank were among the most bought large-cap stocks while HDFC Bank, Hindustan Unilever, Mahindra and Mahindra, TVS Motor, HCL technologies witnessed the most selling in the large-cap space.
In the mid-cap space, ACC, Gland Pharma, Fortis Healthcare, Apollo Tyres, Indian Bank saw the most buying while Shriram Finance, Bharat Electronics, Power Finance Corporation, REC, Cholamandalam Investment witnessed the most selling.
Stocks with Consistent Demand- Names which are witnessing consistent buying over past 5-months
Source: Elara Securities Research, Bloomberg, Capital Line, Ace Mutual Fund 6
Stocks with Consistent Supply- Names which are witnessing consistent selling over the past 5-months
Turning Stocks- Names which were witnessing buying/selling over past 4-months but trend has changed
Turned from buying to selling:
Turned from buying to selling:
Turned from selling to buying