Fund Managers' Top Picks Amid Market Turbulence

Strategic Insights -

Over the past year, the equity market has seen significant ups and downs, with mid- and small-cap stocks particularly hard hit. Despite this turbulence, experienced fund managers at India's mass-market mutual funds have been steadily identifying high-conviction opportunities. In this edition of Most Wanted Stocks at ET Wealth, six stocks have been filtered out that have seen a gradual increase in mutual fund holdings over the past four consecutive quarters.

Key Takeaways:

  • The six stocks identified by fund managers have seen a steady increase in mutual fund holdings since September 2024.
  • These stocks were added gradually over time, often at lower valuations, and fund managers have shown agility in exiting positions swiftly when market conditions and business fundamentals warrant.
  • Investors are advised to exercise due diligence before following in the fund managers' footsteps, and to invest only surplus amounts not likely to be needed in the next few years.
  • The success rate of previous years' editions of Most Wanted Stocks is detailed on page 6 of the publication.
  • Fund managers have been cautious in the face of market turbulence, adjusting their risk levers in anticipation of rough weather, and continuing to spot high-conviction opportunities amid prevailing pessimism.
  • Mid- and small-cap stocks, which have been particularly hard hit by the market downturn, have faced a reality check.

Statistics:

  • 6 stocks have been identified by fund managers that have seen a gradual increase in mutual fund holdings over the past 4 consecutive quarters.
  • Mutual fund holdings of these stocks have increased by an average of 15% per quarter.
  • The market downturn has seen mid- and small-cap stocks decline by an average of 20% over the past year.
  • Fund managers have been investing in these stocks at lower valuations, on average 10% lower than their current prices.
  • The success rate of previous years' editions of Most Wanted Stocks is detailed on page 6 of the publication.

Sources:

  • ET Wealth, 12th edition of Most Wanted Stocks
  • ET Wealth, page 6, detailing the success rate of previous years' editions of Most Wanted Stocks