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.
Latest RBI motion on Paytm firm created a whole lot of unfavourable information in regards to the firm. Many funds are holding this inventory. I don’t wish to dwell a lot on what prompted RBI to provoke the motion and what’s the way forward for this firm. My thought of scripting this submit is to these mutual fund buyers whose funds are holding the Paytm inventory.
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%. Relating to the Nifty LargeMidcap 250 Index, the publicity is 0.64%.
The publicity is with respect to indices. Therefore, Index Funds must match the ratio wherever the Paytm inventory is there. Nonetheless, past this sure lively funds have publicity to this inventory. Which may be a priority for a lot of lively fund buyers.
Do keep in mind that this submit isn’t about lively vs passive. At the moment, passive fund buyers could also be smiling because the publicity is much less. Nonetheless, in some instances, it might be reversed. Therefore, allow us to not dwell on the side of lively vs passive.
Beneath is the checklist of all mutual fund corporations which are at the moment holding Paytm Shares (as of December 2023).
| Fund Identify | 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 Targeted 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 Targeted 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 Expertise 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 Whole 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 subject of this submit.
Do keep in mind that such incidents are frequent and as a mutual fund investor you’re vulnerable to such dangers. Nonetheless, how a lot % of your fund is holding this inventory issues lots.
In case you are a passive investor –
In case you are a passive fund investor, you may’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 danger with passive funds additionally. At the moment, the corporate with which the incident occurred has much less publicity and you might be completely happy. Nonetheless, if the incident occurs to an organization whose publicity is excessive, then it can affect your holding.
Nonetheless, because the publicity is small, you might not sense the large volatility or downtrend in your funds. Therefore, as it’s not beneath your management and Paytm’s publicity is small, you do not want to hassle. For what number of days it stays within the indices because of the continued downfall in its market cap issues lots.
Therefore, as of now, no large concern for passive fund buyers. However as I cautioned, Index Funds usually are not foolproof merchandise to keep away from such incidents sooner or later.
In case you are an lively fund investor –
In case you are an lively fund investor, then clearly you have got taken a danger of believing within the fund supervisor’s functionality to do analysis and deploy your cash in numerous shares. Therefore, you don’t have any different choice however to proceed with the identical agency perception. Do keep in mind that fund managers usually are not gods nor human computer systems who can carry out 100% exactly. Therefore, they’re additionally vulnerable to human error, conduct biases, and misjudgment.
In case you are comfy with the publicity, then proceed. In any other case, take a name primarily based in your risk-taking capability, and your perception in fund managers’ technique.
You seen that within the case of lively funds additionally, you don’t have any management over how a lot % the fund supervisor can spend money on a specific sock (in %). Therefore, regardless that the fund is benchmarked to a sure Index, the % of holding might change. Therefore, taking a name primarily based on underlying shares, churning fee, and fund managers historical past issues lots.
Lesson – Energetic Funds are vulnerable to fund managers’ danger and passive funds are vulnerable to development danger. Selecting the best lively and proper passive fund issues lots moderately than taking a name primarily based on such incidents. You need to assume earlier than investing however not after investing.
