Midcap and smallcap stocks have generally been southward bound since early 2018. This run of falling prices came after a record rally which resulted in pricey valuations and made funds to turn wary of this segment.
But are funds finding opportunities here again?
But they are starting to turn optimistic on midcap stocks, with allocations creeping higher. However, they are yet to increase buying in smallcaps.
Midcaps find favour
Nifty Midcap 100 index has shed 16 per cent since February last year while Nifty Smallcap100 index tanked 30%. While there was some recovery during the election-driven rally, the two indices are still lower than their levels a year, six months or even three months ago.
Funds had been waiting for stock prices to get cheaper, especially during the breakneck 2017 rally. Earlier corrections in the 2014-2017 period had been shortlived. With the s ..
For large-and-midcap funds, the average share of midcap stocks rose to 35.6 per cent in May 2019 (latest available portfolio data) from 32 per cent in December 2018. Half the category’s funds added to midcap portfolio during this period. A few turned extremely aggressive, with their midcap allocation jumping by 5-8 percentage points.
Similarly, among multicap, value, dividend yield and focused funds, just under half the universe added to their midcap allocations. Average mid-cap allocat ..
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