Latest news with #MotilalOswalMidcap
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Business Standard
6 days ago
- Business
- Business Standard
₹23,500 cr June MF inflows: Flexicap funds win, 50% go to just 10 schemes
After hitting a 13-month low in May 2025, equity mutual fund (MF) inflows surged back in June to ₹23,500 crore, a sharp recovery from ₹19,000 crore the previous month. However, beneath the headline number lies a story of concentration and selective investor appetite, with just a handful of schemes dominating the inflow charts. Data analysed by Elara Capital shows that the top 10 mutual fund schemes accounted for nearly 50% of all active fund inflows last month. Flexi Cap and Midcap Schemes Dominate The Flexi Cap category led the charge with ₹5,700 crore in inflows—the highest since July 2021. Much of this was absorbed by the Parag Parikh Flexicap Fund, which alone accounted for 12.6% of total active inflows and 50% of the category's one-year inflow. Notably, a significant portion of this fund's capital is either sitting in cash or has been deployed into primary market issuances—a key trend across MF cash movements this year. In the midcap segment, while inflows remained in line with historical averages, around 42% of incremental capital went into just one fund—Motilal Oswal Midcap—highlighting continued fund-level concentration. Sectoral and Thematic Funds Lose Steam Investor enthusiasm for sectoral and thematic funds seems to be waning. The category saw modest inflows of only ₹470 crore in June. Energy funds, once popular, saw outflows of ₹740 crore—the sharpest monthly redemption in four years. Manufacturing funds faced redemptions for the seventh consecutive month, while Quant and Logistics-themed schemes also witnessed fresh selling pressure. "The most pronounced investor enthusiasm since 2023 was seen in Manufacturing, Innovation, Business Cycle, and Infrastructure-themed funds. However, Manufacturing has already witnessed redemptions over the past few months, and inflows into other categories have also sectoral funds, Energy and Infra categories have also begun to see outflows," noted the report. Top-10 schemes take 50% of the total active inflows in Jun led by Parag Parikh Flexicap Fund (12.6%), HDFC Flexicap Fund (7.4%), Motilal Oswal Midcap Fund (5%), Bandhan Smallcap Fund (3.5%) and HDFC Focused Fund (3.3%) Large-cap Reallocation Underway June also saw a noticeable uptick in Large Cap allocations across scheme categories: Midcap schemes increased their largecap exposure by 3.7% Large & Midcap schemes added 2.4% Flexi Cap schemes raised it by 1.1% However, Multicap allocations remained unchanged, and Small Cap funds are already near their record largecap allocation of 7.2%. Despite these shifts, most equity schemes remain underweight on largecaps compared to long-term averages—implying further reallocation could be underway, particularly as markets stabilize. Cash Levels Plunge—Where Did the Money Go? A sharp drawdown in MF cash positions was one of the most significant trends in June. Overall cash levels fell to 5.5%, down from 6.3% in May and a peak of 6.8% in April. This translates to an INR 16,400 crore decline in cash, with total cash across active equity MFs now at ₹1.84 lakh crore—close to pre-COVID averages. The capital has largely been deployed into primary market issues, including IPOs and pre-IPO placements. Historical trends suggest that such aggressive deployment phases have historically preceded both market peaks (2012, 2013, 2017) and major uptrends (2013, 2016, 2020), making this a critical signal for investors to monitor. Notably: Largecap schemes marginally increased cash to ₹17,580 crore. Midcap funds saw the sharpest cash drawdown—from 7.3% to 5.3%, led by deployment from Motilal Oswal Midcap Fund. Smallcap funds also trimmed cash from 8.3% in April to 7% in June. What It Means for Investors While the headline rebound in inflows signals improved sentiment, concentration risk remains high, with a few high-performing funds attracting a majority of capital. Investors should remain mindful of this trend when evaluating MF portfolios. The aggressive cash deployment may hint at institutional bullishness, but it also means that fund managers are now more exposed to market swings. Meanwhile, fading interest in thematic and sectoral funds suggests a shift towards core diversified categories and quality stock-picking. Key Takeaways for Investors: Diversify across fund houses and not just top-performing schemes. Monitor largecap exposure in your MF holdings; many funds may realign portfolios over the next quarter. Be cautious with thematic bets, especially in funds facing sustained redemptions. Watch for signals in cash allocation trends, which may precede market shifts.
Mint
19-06-2025
- Business
- Mint
Indian stock market: Mid-cap magic drives index 20% higher in just 4 months. Will this breakneck rally extend or end?
Mid-cap stocks outlook: Buoyed by improving investor sentiment and a renewed appetite for risk, mid-cap stocks have taken centre stage on Dalal Street. The Nifty Midcap 100 index has surged nearly 20% over the past four months, driven by strong earnings growth and a shift in market leadership. Q4 FY25 marked a clear turning point, with mid-caps outshining both large and small-caps on the earnings front. The Motilal Oswal Midcap universe reported 19% YoY PAT growth—nearly double that of large-caps and well ahead of small-caps. Amid a volatile start to the year, amid tariff uncertainty, foreign investor outflows, and broader economic concerns, the Nifty Midcap 100 is just 1% higher YTD, yet, within the index, select stocks have soared up to 75% in 2025—led by defence counters. Top gainers include Solar Industries, Bharat Dynamics, Mazagon Dock, and Cochin Shipyard, with support from BSE, SBI Cards, and Aditya Birla Capital, reflecting broad-based participation across sectors. This rally also coincides with the return of foreign institutional investor (FII) inflows, totalling ₹ 11,544 crore, alongside 23 consecutive months of domestic institutional investor (DII) buying. "Overall domestic flows have been strong in June and 2025. In June, around ₹ 50,000 crore of stocks have been bought by DIIs, and the trend has remained the same for 2025 as well. Out of this, 34-40% of the flows have gone into mid-cap stocks," said Vaqarjaved Khan, Sr. Fundamental Analyst, Angel One Ltd, pegging it as one of the key reasons behind the rise in mid-cap stocks. Encouraging Q4 earnings results from several companies, particularly in the mid-cap space, have boosted investor confidence and driven buying interest, opined Avinash Pathak, Analyst at LKP Securities. According to a Motilal Oswal report, the midcap space saw a favourable upgrade cycle this quarter, reversing the downgrade-heavy trend seen in the past three quarters, signalling improved earnings visibility and greater investor confidence. A healthy Indian economy and RBI rate cut are among other factors that Pathak believes lend support to the mid-caps. With many factors aligning for the rally in mid-cap stocks, the key question remains how long this trend will sustain, as valuations are becoming stretched following such a sharp rise. The Nifty Midcap 100 index, at around 29.3x FY26 estimated earnings, is trading at a premium to its 10-year average. This raises concerns about overvaluation in certain pockets, especially if earnings growth doesn't keep pace, said LKP Securities' Pathak. He added that we have already seen instances of profit booking in small and mid-cap stocks after multi-day rallies, suggesting that investors are becoming watchful of valuations. Even today (June 19), the Nifty Mid-cap 100 is down for the third day, underperforming the benchmark, as the Iran-Israel conflict hammers sentiment. "The sustainability will largely depend on continued strong earnings growth and margin stability for mid-cap companies. Any disruption in global demand or resetting of cost bases could impact this," Pathak opined. He advised focusing on fundamentally strong mid-cap companies with good earnings visibility, lower debt, and sectoral tailwinds, which will be crucial rather than a broad-based approach. As per ICICIDirect, Nifty midcap is undergoing a healthy retracement after a 28% rally, which should be used as a buying opportunity based on a few factors. "Since the April low, the midcap index has not corrected >6% while on the weekly chart it has not closed below its previous week's low. In the current scenario, despite ongoing volatility, the midcap index has been maintaining the same rhythm. Further, the ratio chart of Nifty 500/Nifty 100 has been inching upward, which indicates relative outperformance," the brokerage said. Motilal Oswal also believes that midcaps are no longer just a beta play—they are increasingly becoming alpha generators. Their ability to adapt, diversify, and scale across core economic themes like electrification, infrastructure, and financial inclusion reinforces their relevance in long-term portfolios, it added. Angel One's Vaqarjaved Khan recommended being watchful and selective. "Over the next one year, the outperformance can continue if global macro holds stable, corporate earnings delivery happens, and Government spending momentum continues. Avoid stocks that have stretched valuations compared to their historical averages and peers," Khan added. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
