Mutual Fund Portfolios See Shift from Large-Cap to Small-Cap Holdings in March

Equity Mutual Funds See Sharp Jump in Inflows in March

Equity mutual funds witnessed a significant surge in investments in March, with net inflows rising to Rs 40,450 crore from Rs 25,978 crore in the previous month. This rebound comes after a slower start to the year, indicating that investors are gradually stepping back into equities despite ongoing market volatility.

Flows Across Categories

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Top Funds by Inflows

Nippon India Large Cap Fund

The Nippon India Large Cap Fund attracted a substantial Rs 1,043.59 crore in March, making it one of the most preferred largecap schemes for the month. The fund manages assets worth Rs 46,520.53 crore and has delivered a one-year return of 8.10 percent. Managed by Sailesh Raj Bhan, the fund runs a diversified portfolio, holding 65 stocks, higher than the category average of around 49. The fund maintains a high equity exposure of 95.76 percent, with about 43.6 percent allocated to its top 10 holdings.

In March, the fund added one stock, Shriram Finance, while exiting Grasim Industries, Honeywell Automation India, and Tata Motors. The turnover ratio stood at 27 percent in March, in line with recent months.

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HDFC Mid Cap Fund

The HDFC Mid Cap Fund attracted inflows of Rs 1,475.70 crore, making it one of the top choices among midcap investors. The fund manages assets worth Rs 85,357.92 crore and has a one-year return of 15.67 percent. Managed by Chirag Setalvad, the fund follows a well-diversified approach, holding 78 stocks, higher than the category average of around 68. The fund's equity exposure stands at 92 percent, with about 34 percent allocated to its top 10 holdings.

Portfolio activity remained muted in March, with no additions or exits, suggesting the fund is staying the course amid market volatility. The turnover ratio stood at 7.16 percent in March, lower than earlier months, indicating very low churn and a strong buy-and-hold approach.

Bandhan Small Cap Fund

The Bandhan Small Cap Fund saw inflows of Rs 1,571.93 crore in March, making it a top pick in the smallcap space. The fund manages assets worth Rs 20,129.67 crore and has delivered a one-year return of 11.8 percent. Managed by Manish Gunwani, the fund follows a highly diversified strategy, holding 251 stocks against the category average of around 85, indicating a low-concentration approach.

The fund's equity exposure stands at 87 percent, with just 19 percent allocated to its top 10 holdings, reflecting limited reliance on a few large bets. March saw seven additions, including Steel Authority of India, Reliance Industries, Larsen & Toubro, and Oil India, and one exit (Sai Life Sciences). The fund is not a pure small-cap play, with 66 percent in smallcaps, 15 percent in midcaps, and 4 percent in large caps, indicating a more balanced allocation.

Parag Parikh Flexi Cap Fund

The Parag Parikh Flexi Cap Fund attracted the highest inflows across categories in March at Rs 3,949.93 crore. The fund manages assets worth Rs 1,28,966.50 crore and has delivered a one-year return of 6.12 percent. Managed by Rajeev Thakkar, the fund runs a relatively concentrated portfolio, holding 39 stocks, lower than the category average of around 63, reflecting a high-conviction approach.

The fund's equity exposure stands at 78 percent, with a significant 50 percent allocated to its top 10 holdings, indicating a strong tilt towards a few key bets. March saw no additions but a sharp portfolio reshuffle, with 34 exits, including Bajaj Finance, Tata Steel, and Punjab National Bank. The fund remains largely largecap oriented, with about 62.5 percent in largecaps and minimal exposure to midcaps (2 percent) and small-caps (2.71 percent), signalling a relatively conservative stance.

Kotak Multicap Fund

The Kotak Multicap Fund saw inflows of Rs 910 crore in March, making it the top inflow-gainer in the multicap category. The fund manages assets worth Rs 22,095.33 crore and has delivered a one-year return of 11.54 percent. Managed by Devender Singhal, Kotak Multicap Fund holds 71 stocks, slightly lower than the category average of around 82, indicating a moderately concentrated portfolio.

The fund maintains a high equity exposure of 97.5 percent, with about 33 percent allocated to its top 10 holdings, reflecting a balanced approach between diversification and conviction. Portfolio changes were minimal in March, with one addition, United Spirits, and no exits. Its market-cap allocation remains well-balanced, with 41 percent in largecaps, 27 percent in midcaps, and 30 percent in smallcaps, in line with the multicap mandate. The turnover ratio stood at 49.85 percent in March, largely in line with recent months, indicating relatively higher churn and active portfolio management.