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Thursday, February 22, 2024

Ought to I exit Mutual Fund due to Paytm holding?


Ought to I exit Mutual Fund due to Paytm holding? As of December 2023, round 68 mutual funds are holding the Paytm inventory of their portfolio.

Current RBI motion on Paytm firm created a variety of unfavourable information in regards to the firm. Many funds are holding this inventory. I don’t need to dwell a lot on what prompted RBI to provoke the motion and what’s the way forward for this firm. My concept of scripting this submit is to these mutual fund traders whose funds are holding the Paytm inventory.

Mutual Fund because of Paytm holdingMutual Fund because of Paytm holding

As of December 2023, round 68 mutual funds are holding the Paytm inventory. In September 2023, the variety of shares holding was 1,77,77,085. It elevated to 2,11,46,868 in October 2023. In November 2023, the variety of shares held by Mutual Fund Corporations was 2,10,14,596 and in December it was 3,15,10,986.

Do keep in mind that Paytm (One97 Communications Ltd.) is a part of the Nifty Midcap 150 Index and as per the present holding construction, its weightage is 0.51%. Concerning the Nifty LargeMidcap 250 Index, the publicity is 0.64%.

The publicity is with respect to indices. Therefore, Index Funds need to match the ratio wherever the Paytm inventory is there. Nevertheless, past this sure energetic funds have publicity to this inventory. That could be a priority for a lot of energetic fund traders.

Do keep in mind that this submit isn’t about energetic vs passive. At the moment, passive fund traders could also be smiling because the publicity is much less. Nevertheless, in some instances, it could be reversed. Therefore, allow us to not dwell on the facet of energetic vs passive.

Under is the listing of all mutual fund corporations which might be at the moment holding Paytm Shares (as of December 2023).

Fund Title Dec-23 Dec-23 Dec-23 Nov-23 Oct-23 Sep-23
AUM (in Rs. cr) % of AUM No. of Shares No. of Shares No. of Shares No. of Shares
Mirae Asset Massive Cap Fund-Reg(G) 37969.2 1.13 6772501 5522501 5522501 5522501
Mirae Asset Centered Fund-Reg(G) 9276.5 2.9 4235151 3506380 3506380 3506380
Quant Mid Cap Fund(G) 4222.4 3.17 2105397 300000 0 0
Nippon India Massive Cap Fund(G) 20217.6 0.63 2000000 0 0 0
Mirae Asset ELSS Tax Saver Fund-Reg(G) 20430.8 0.51 1650000 0 0 0
Nippon India Multi Cap Fund(G) 24590.2 0.41 1598104 0 0 0
Mirae Asset Midcap Fund-Reg(G) 13815.1 0.69 1500000 0 0 0
Mirae Asset Massive & Midcap Fund-Reg(G) 32492.2 0.28 1452236 0 0 0
Nippon India Banking & Monetary Companies Fund(G) 5192.5 0.98 800000 0 0 0
Aditya Birla SL Flexi Cap Fund(G) 19340.6 0.24 744612 744612 744612 744612
Aditya Birla SL Frontline Fairness Fund(G) 25898.4 0.16 655664 759942 759942 759942
Nippon India Flexi Cap Fund-Reg(G) 5753.1 0.62 557470 0 0 0
Nippon India Balanced Benefit Fund(G) 7484.4 0.47 550000 0 0 0
Nippon India Innovation Fund-Reg(G) 1172 2.96 546130 196130 371130 371130
Motilal Oswal Centered Fund-Reg(G) 1784.2 1.57 441804 684000 884000 884000
Aditya Birla SL Digital India Fund(G) 4590.4 0.59 423754 423754 523754 666918
UTI Innovation Fund-Reg(G) 549.7 4.8 415350 280350 215350 0
Mahindra Manulife Multi Cap Fund-Reg(G) 2664.7 0.95 400000 400000 400000 0
Nippon India Imaginative and prescient Fund(G) 4057.4 0.58 370000 0 0 0
HSBC ELSS Tax saver Fund-Reg(G) 3557 0.56 315600 491000 491000 491000
Aditya Birla SL Fairness Benefit Fund(G) 5566.4 0.34 294174 294174 294174 294174
HSBC Massive & Mid Cap Fund-Reg(G) 2589.8 0.71 288500 530000 530000 530000
Helios Flexi Cap Fund-Reg(G) 797.1 1.95 244170 150300 0 0
Mahindra Manulife Mid Cap Fund-Reg(G) 1902.7 0.8 240000 180000 100000 0
Franklin India Know-how Fund(G) 1189.9 1.23 230649 180000 180000 180000
Mahindra Manulife Massive & Mid Cap Fund-Reg(G) 1695.9 0.86 230000 230000 230000 0
Mahindra Manulife Flexi Cap Fund-Reg(G) 1162.5 1.23 225000 170000 170000 170000
HDFC Massive and Mid Cap Fund-Reg(G) 15021.9 0.09 220304 220304 220304 220304
Bajaj Finserv Flexi Cap Fund-Reg(G) 2064.1 0.65 209874 338238 271660 134964
Mirae Asset Aggressive Hybrid Fund-Reg(G) 8308.4 0.15 196316 196316 196316 196316
Mahindra Manulife ELSS Tax Saver Fund-Reg(G) 756.3 1.22 145800 110800 35000 0
Mahindra Manulife Aggressive Hybrid Fund-Reg(G) 949.8 0.9 135000 100000 85000 85000
Motilal Oswal Fairness Hybrid Fund-Reg(G) 417.9 1.98 130455 130455 130455 130455
Motilal Oswal Nifty Midcap 150 Index Fund-Reg(G) 1248.1 0.64 125054 106408 103323 101763
Quant Teck Fund-Reg(G) 233.9 3.26 120000 120000 120000 0
Nippon India ETF Nifty Midcap 150 1095.4 0.64 109601 94225 93387 98632
Nippon India Nifty Midcap 150 Index Fund-Reg(G) 1045.4 0.64 104609 88758 86603 99028
JM Worth Fund(G) 405.6 1.55 98800 79300 79300 79300
Aditya Birla SL Banking & Monetary Companies Fund-Reg(G) 3062.1 0.2 94985 94985 171600 171600
Union Innovation & Opp Fund-Reg(G) 567.3 0.83 74140 174540 174540 174540
Mirae Asset Nifty Midcap 150 ETF 595.4 0.64 59626 52629 51868 50958
Mahindra Manulife Balanced Benefit Fund-Reg(G) 616.9 0.59 57500 57500 57500 0
Motilal Oswal Nifty Midcap 100 ETF 341.9 0.79 42655 38988 39031 45871
Mirae Asset Banking and Monetary Companies Fund-Reg(G) 1601.6 0.12 30000 30000 30000 30000
ICICI Pru Nifty Midcap 150 Index Fund-Reg(G) 292.1 0.64 29225 23085 21784 19742
Tata Nifty India Digital ETF 62.3 2.89 28316 27958 28286 24446
Aditya Birla SL ESG Integration Technique Fund-Reg(G) 725.1 0.24 27800 27800 49032 49032
SBI Nifty Midcap 150 Index Fund-Reg(G) 267.1 0.64 26698 21329 20254 19577
ICICI Pru Nifty Midcap 150 ETF 260.2 0.64 26047 22084 21532 21502
Kotak Nifty Alpha 50 ETF 80.9 2 25459 0 0 0
HSBC Fairness Financial savings Fund-Reg(G) 211.2 0.51 17000 17000 17000 17000
ICICI Pru Nifty Monetary Companies Ex-Financial institution ETF 63.4 1.54 15314 12469 12450 11126
Aditya Birla SL Nifty Midcap 150 Index Fund-Reg(G) 150.3 0.64 15036 12646 12623 12135
Motilal Oswal Nifty 500 Index Fund-Reg(G) 658 0.11 11159 9409 9207 8926
Navi Nifty Midcap 150 Index Fund-Reg(G) 96.2 0.64 9613 7803 7302 6923
HDFC NIFTY Midcap 150 Index Fund-Reg(G) 80.5 0.64 8059 6104 5551 4671
Mirae Asset Fairness Financial savings Fund-Reg(G) 834.6 0.06 8000 8000 8000 8000
Bandhan Nifty Alpha 50 Index Fund-Reg(G) 17.8 1.94 5433 0 0 0
Edelweiss NIFTY Massive Mid Cap 250 Index Fund-Reg(G) 82.5 0.32 4119 3466 3181 3152
Kotak Nifty Monetary Companies Ex-Financial institution Index Fund-Reg(G) 13.2 1.54 3193 2651 2376 2274
Motilal Oswal S&P BSE Financials ex Financial institution 30 Index Fund-Reg(G) 10.6 1.76 2932 3292 2583 2589
ICICI Pru S&P BSE 500 ETF 166.4 0.11 2902 2712 2586 2461
HDFC NIFTY Midcap 150 ETF 15.2 0.55 1313 1107 1001 899
Groww Nifty Complete Market Index Fund-Reg(G) 63.7 0.09 887 625 518 0
HDFC S&P BSE 500 Index Fund-Reg(G) 31.5 0.11 545 408 392 346
Motilal Oswal Nifty 500 ETF 27.8 0.11 467 403 403 403
UTI Nifty Midcap 150 ETF 3.7 0.64 371 425 425 1459
HDFC S&P BSE 500 ETF 6.5 0.11 113 135 135 135

Ought to I exit Mutual Fund due to Paytm holding?

Allow us to now talk about extra in regards to the core matter of this submit.

Do keep in mind that such incidents are widespread and as a mutual fund investor you might be liable to such dangers. Nevertheless, how a lot % of your fund is holding this inventory issues rather a lot.

In case you are a passive investor –

In case you are a passive fund investor, you possibly can’t blame anybody because it’s a part of the Index. Fortunately it’s a small a part of indeices and therefore not a worrying issue.

Do keep in mind that that is the chance with passive funds additionally. At the moment, the corporate with which the incident occurred has much less publicity and it’s possible you’ll be completely satisfied. Nevertheless, if the incident occurs to an organization whose publicity is excessive, then it’ll influence your holding.

Nevertheless, because the publicity is small, it’s possible you’ll not sense the massive volatility or downtrend in your funds. Therefore, as it isn’t below your management and Paytm’s publicity is small, you don’t want to trouble. For what number of days it stays within the indices because of the continued downfall in its market cap issues rather a lot.

Therefore, as of now, no huge concern for passive fund traders. However as I cautioned, Index Funds aren’t foolproof merchandise to keep away from such incidents sooner or later.

In case you are an energetic fund investor –

In case you are an energetic fund investor, then clearly you’ve taken a danger of believing within the fund supervisor’s functionality to do analysis and deploy your cash in varied shares. Therefore, you haven’t any different choice however to proceed with the identical agency perception. Do keep in mind that fund managers aren’t gods nor human computer systems who can carry out 100% exactly. Therefore, they’re additionally liable to human error, conduct biases, and misjudgment.

In case you are snug with the publicity, then proceed. In any other case, take a name primarily based in your risk-taking means, and your perception in fund managers’ technique.

You seen that within the case of energetic funds additionally, you haven’t any management over how a lot % the fund supervisor can put money into a selected sock (in %). Therefore, though the fund is benchmarked to a sure Index, the % of holding could change. Therefore, taking a name primarily based on underlying shares, churning price, and fund managers historical past issues rather a lot.

Lesson – Energetic Funds are liable to fund managers’ danger and passive funds are liable to building danger. Choosing the proper energetic and proper passive fund issues rather a lot slightly than taking a name primarily based on such incidents. It’s important to suppose earlier than investing however not after investing.

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