Midcap stocks that find no takers among active fund managers. Check your portfolio
Mid-cap stocks that are part of the portfolio of equity schemes have rewarded the investors. However, companies that lack business sustainability, are buried in debt, do not execute business strategies efficiently, and come with an unattractive valuation, rarely find a place in the portfolio of the actively managed mutual fund schemes.
A strong financial record, good quality management, scalable business and an attractive valuation are some of the parameters that fund managers look for while selecting stocks. Companies that fall short on such metrics rarely find a place in the portfolio of the schemes. A Moneycontrol study shows that many stocks that are classified as midcaps by industry body, the Association of Mutual Funds in India, are not part of the portfolio of many actively managed schemes. AMFI has classified stocks that are ranked between 101 and 250 in terms of full market capitalisation as midcaps.
On the other hand, the most preferred midcap stocks are Coforge, Hero MotoCorp and Samvardhana Motherson International that are held by 162, 141 and 140 active schemes respectively. The following are the midcap stocks (as defined by AMFI) that are either totally ignored or are least favoured by active mutual fund managers. Experts believe that valuations of some businesses have gone up significantly. As and when these valuations cool down and leverage comes down significantly, they may become attractive on the watchlist of the fund managers. Only actively managed equity funds and hybrid funds (623 schemes) were considered for the study. Arbitrage funds and passive funds (index funds and exchange-traded funds) were excluded. Data as of March 31, 2024. Source: ACEMF. Stocks returns data as per Moneycontrol.
Adani Wilmar Sector: Edible Oil Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: -15% 3-year return: NA
5/13
UCO Bank Sector: Banking Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 110% 3-year return: 407%
6/13
Fertilizers And Chemicals Travancore Sector: Fertilizers Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 103% 3-year return: 536%
Central Bank Of India Sector: Banking Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 143% 3-year return: 298%
8/13
Lloyds Metals And Energy Sector: Sponge Iron Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 153% 3-year return: 5,529%
9/13
Punjab & Sind Bank Sector: Banking Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 98% 3-year return: 263%
The New India Assurance Company Sector: General Insurance Total number of active schemes that held the stock: Nil MFs’ investment value: Nil 1-year return: 116% 3-year return: 49%
11/13
Patanjali Foods Sector: Edible Oil Total number of active schemes that held the stock: 1 MFs’ investment value: Rs 33 crore 1-year return: 55% 3-year return: 109%
12/13
Rail Vikas Nigam Sector: Civil Construction Total number of active schemes that held the stock: 5 MFs’ investment value: Rs 4 crore 1-year return: 250% 3-year return: 925%
13/13
Bank Of Maharashtra Sector: Banks Total number of active schemes that held the stock: 5 MFs’ investment value: Rs 82 crore 1-year return: 130% 3-year return: 180%
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