HDFC Bank, LIC, Sona BLW, Varroc Eng.: Top stocks that were bought by mutual funds in July

Mutual fund investment: The most recent data released by the Association of Mutual Funds of India (AMFI) reveals that in July, the net assets under management (AUM) in the mutual fund industry reached an impressive Rs 64,96,653.14 crore. This significant milestone represents a noteworthy increase, surpassing the Rs 60 lakh crore threshold achieved in June. The report also highlights a decrease in inflows for open-ended equity mutual funds by 8.61%, totaling Rs 37,113.39 crore.

The decline in inflows can be attributed to reduced investments in both large-cap and mid-cap funds. Despite this setback, open-ended equity funds have maintained a positive trend of inflows for the 41st consecutive month. This data indicates a resilient performance within the mutual fund industry amidst changing market conditions.

The mutual fund houses purchased stocks valued at Rs 206 billion, as per the Mutual Fund Insights report by Nuvama Alternative & Quantitative Research. Mutual fund managers engage in active portfolio management, adjusting their holdings by adding or removing stocks to optimise returns for investors.

Here is a breakdown of the large-cap, mid-cap, and small-cap stocks that mutual funds acquired and divested in July.

> Large-cap stocks: Adani Enterprise and IDBI Bank were the new entrants in July. Besides, the notable gainers over the past three months were HDFC Bank, Life Insurance Corporation (LIC), Hindustan Unilever, ITC, and Larsen & Toubro (L&T).

On the contrary, the top losers during this period were Bharti Airtel, NTPC, Hindustan Aeronautics, Avenue Supermarts, and Bharat Electronics.

> Midcap stocks: The new entrants in this segment were Lloyds Metals, New India Assurance, and Yes Bank. For the last three consecutive months - Sona BLW, Jubilant FoodWorks, Lloyds Metals & Energy, Apar Industries, and SunTV Network -- were continuously bought by the MF houses.

The top reductions were made from SCI, Can Fin Homes, National Aluminium, and Railtel Corporation.

> Smallcap stocks: The notable new additions in the small-cap segment included JTL Industries, SMS Pharmaceuticals, Ramkrishna Forgings, Technocraft Industries, and Pitti Engineering. Within the small-cap stock category, prominent holdings comprised Crompton Greaves, Blue Star, Carborundum Universal, Emami, and Kalpataru Projects.

In the small-cap space, mutual funds made strategic adjustments to their portfolios over the past three months. Notable additions include Redtape, Arvind Limited, Lloyds Engineering, Power Mech Projects, and Varroc Eng, signaling a positive outlook on these companies. On the other hand, mutual funds decided to reduce their positions in Ahluwalia Contracts, CMS Info Systems, Avanti Feeds, Mahindra Holiday, and Jupiter LifeLine, suggesting a shift in their investment strategy.

Furthermore, mutual funds decided to completely exit their holdings in five small-cap stocks, namely SCI, CPCL, Mangalam Cement, Sundaram Clayton, and Puravankara. This move indicates a significant change in their investment priorities and a reevaluation of the potential of these companies in their portfolios.