What stocks are mutual funds buying?

There are various categories of mutual funds from different AMCs. Each of those funds needs not to buy the same set of stocks. The choices here will be based on the risk/return metrics, underlying objective of the firm and weights, and fund manager discretion. Another way to look at this is, just because a stock is in demand from mutual funds, doesn’t mean it will work well with your individual portfolio.

This shortcut to finding stocks to invest in can destroy your portfolio in the long run. In fact, there are many investors who look at the mutual fund allotments IPOs before subscribing for the IPO. Most of these investors aren’t aware when the mutual funds sell off their entire holding in the newly listed companies.

In fact, just recently HDFC Mutual Fund’s Mid-Cap Opportunities Fund has sold off its entire holdings in Paytm parent One97 Communication. Another scheme from the fund house, HDFC Balanced Advantage Fund, has trimmed its exposure to Paytm by over 91%. The shares of Paytm have fallen over 51% from the listing price. So, you need to be very careful and do your due diligence before mirroring your investments with mutual funds.