Retail investors often look at what mutual funds are buying and selling to understand the market trend. Many investors decide their investment strategy on this basis. Small investors seeking higher returns especially look at midcap and smallcap stocks. However, they have to take the same amount of risk in these stocks. Domestic brokerage firm Motilal Oswal Financial Services has released a report, which tells what mutual funds have bought and sold.

According to this report, mutual funds have bought 60% of the Nifty Midcap 100 stocks. Whereas, they have bought 53% of the Nifty Smallcap 100 stocks. This purchase figure is of last month.

Which midcap - smallcap stocks increased trust? The top midcap stocks in which these mutual funds have bought include Yes Bank, HUDCO, Tata Elxsi, Godrej Properties and IREDA. Mutual funds' share in Yes Bank has seen a 166.7% increase on a monthly basis. The total share of mutual funds in this bank has now reached ₹ 430 crore. Similarly, the share in HUDCO has increased by 93% on a month-on-month basis to 2.89 crore units. This increase has been 77.6% in Tata Elxsi, 44% in Godrej Properties and 38.8% in IREDA. Talking about the Nifty Smallcap 100 index, the stocks that mutual funds invested the most in in the month of December were Signature Global, MGL, CPCL, Narayana Hrudayalay and J&K Bank. Mutual funds' stake in these stocks saw a 12-40% increase. Which midcap-smallcap stocks lost trust? Apart from buying, mutual funds have also sold many midcap and smallcap stocks. Tata Tech, RVNL, Vodafone Idea, Hindustan Zinc and L&T Finance are some of the midcap stocks in which mutual funds have booked profits during the month of December. On a monthly basis, the share of mutual funds in Tata Technologies of Tata Group has come down by 16% to 29 lakh units. Meanwhile, they have sold 13% stake in Vodafone Idea. Among the Nifty Smallcap stocks in which mutual funds have sold during December 2024, Blue Star, Brigade Enterprises, Aadhar Housing Finance, ITI, and Piramal Pharma are on top. Which sectors are mutual funds eyeing? During December 2024, mutual funds have shown the most confidence in sectors like healthcare, retail, consumer durables, technology and real estate. In contrast, mutual funds have reduced their share in sectors like private banks, capital goods, utilities, auto, consumer, oil & gas, NBFCs, PSU Bank, metal, chemicals, insurance and media. Private banks still have the highest share of 16.6% in the portfolio of mutual funds. This is followed by technology (9.4%), auto (8.2%) and capital goods (7.8%). Mutual funds have increased their share the most in consumer durables, retail, real estate, healthcare and textiles sectors. There has been an increase in the inflow of equity mutual funds during December 2024. Compared to the month of November, this inflow has increased by 15% to ₹ 41,155 crore. After this, inflow has also been seen increasing in midcap, smallcap and thematic funds.