Mid-cap stocks with quality businesses and healthy prospects have always found a place in the long-term portfolios of investment managers, irrespective of market movements. They withstand the corrections relatively well and deliver better returns in the long run.
Innovation themed mutual funds are the new flavour of the season
The outperformance of large-cap mutual fund schemes lies in, among other things, how efficiently fund managers manage the remaining 20 percent portion that they have to invest in small- and mid-cap stocks. These 10 mid-caps stocks tend to spice up the return of large-cap funds thus, in turn, likely to outperform the benchmarks.
Children-oriented funds are open-ended schemes with a lock-in period of at least five years or till the time the child attains the age of maturity, whichever is earlier. The compulsory lock-in provides fund managers a leeway to buy quality mid-cap stocks and hold for the long term
Contra funds identify out of favour stocks due to short term challenges that could have potential to show a turnaround
Companies that belong to the ‘manufacturing’ sector are likely to benefit from the Indian government’s ‘Make in India’ drive. Small wonder then that of the six schemes that invest predominantly in manufacturing sectors, four were launched in the last one year or so ago
Mutual funds schemes rejig their portfolios based on this classification aligning with the regulator’s mandate. Especially, midcap schemes are likely to add exposure in these stocks to maintain the stipulated limit
Besides debt, commodities, and REITs & InvITs, multi-asset allocation mutual funds mainly invest in equities from different market capitalisation categories. They held about 13 percent of their equity portion in midcap stocks
Fund managers are holding these lethargic stocks in their portfolio believing that these businesses will play out well in the future
Some 66 stocks on the Nifty Midcap 150 index delivered positive returns in 2022. The Nifty 50-TRI gained 6 percent, while Nifty Midcap 150-TRI clocked 4 percent rise
Sharp rise in prices of these small-cap stocks resulted in multi-fold increase in their market capitalisation, which in turn, marked their entry into the mid-cap space