Fund managers' September bets wilt in October

India's equity fund managers' sell calls during the month of September did not go well in October. Of the top 10 sell calls, eight stocks have ended the trade in October with gains.

Tata Motors, the top liquidated stock then, gained seven per cent in October. Collectively, equity investment managers had sold shares worth Rs 802 crore of the automobile maker. Similarly, Grasim Industries and Adani Ports & SEZ made double-digit gains in October.

The fund managers' best sell call was on YES Bank; it eroded a little over 10 per cent of investor wealth this month. Though, the counter had also touched a high of about Rs 375 before settling the month at Rs 314.35 on the BSE.

Fund managers maintain a month is a too short period to judge their investment call. They tend, they note, to take a long investment horizon, and are not perturbed with short-term movement in their portfolios' picks. 

As for the 10 most invested stocks in September, the performance, barring four picks (Interglobe Aviation (IndiGo), GAIL, ICICI Bank and Bharat Forge) was in the range of 6.45 per cent (SBI Life Insurance) in negative territory to a positive three per cent (ITC). In all, Rs 11,500 crore of incremental flows was pumped into these 10 stocks. ICICI Lombard and SBI Life got the lion's share, with fund managers stoking about Rs 4,500 crore in these counters. However, both these ended in a negative zone.

Fund managers have said that the current times are a challenge. With strong inflow from domestic investors amid a sharp gain in stock prices, money managers are finding it difficult; they say the surge in inflow can even at times be 'unmanageable'. 

It is interesting to note that after taking a sell call on YES Bank, Tata Motors, Tata Steel, Maruti Suzuki and Vedanta in September, there was huge buying interest in these counters during October. Commentary from the top management of Maruti Suzuki and Tata Motors and the government's renewed thrust on infrastructure have made several public sector banks, power, and infrastructure companies attractive to fund managers. The report of their October investment in stocks will be released in the next fortnight.