Here Are The 10 Midcap Stocks That Are Picked By Large Cap Mutual Funds; Dont Miss Out On Names

Large-cap funds have emerged victorious after years of underperformance, showcasing a newfound strategy that blends the best of both worlds. According to data from the Association of Mutual Funds in India (AMFI), two-thirds of actively managed large-cap funds outperformed their benchmark indices in the wake of a stellar equity market performance in 2023.

The key to their success lies in a shrewd approach adopted by fund managers who strategically allocate a portion of their corpus, typically 20%, outside the confines of large-cap stocks. This dynamic shift has led to a surge in returns, fueled by investments in promising mid and small-cap stocks.

As per ACEMF data, large-cap funds have allocated approximately Rs 2.7 lakh crore in large-cap stocks, while venturing into midcap and smallcap territories with Rs 26,447 crore and Rs 5,720 crore respectively. These mid and small-cap stocks serve as catalysts, enhancing the overall returns of large-cap funds and enabling them to outshine their benchmarks.

Delving deeper into the portfolio compositions of these funds as of March 31, 2024, reveals some notable midcap darlings favoured by a majority of large-cap funds.

1. Samvardhana Motherson International

Number of large-cap funds holding the stock: 12

Sample of large-cap funds holding the stock: DSP Top 100 Equity, Groww Largecap, and SBI BlueChip

2. Hero MotoCorp

Number of large-cap funds holding the stock: 10

Sample of large-cap funds holding the stock: JM Large Cap, ICICI Pru Bluechip, and Bank of India Bluechip

3. Info Edge (India)

Number of large-cap funds holding the stock: 9

Sample of large-cap funds holding the stock: Taurus Large Cap, Axis Bluechip, and UTI Large Cap

4. The Indian Hotels Company

Number of large-cap funds holding the stock: 8

Sample of large-cap funds holding the stock: Nippon India Large Cap, Baroda BNP Paribas Large Cap, and PGIM India Large Cap

5. Cummins India

Number of large-cap funds holding the stock: 7

Sample of large-cap funds holding the stock: Groww Largecap, SBI BlueChip, and Union Largecap

6. The Phoenix Mills

Number of large-cap funds holding the stock: 6

Sample of large-cap funds holding the stock: Motilal Oswal Large Cap, HSBC Large Cap, and Bandhan Large Cap

7. PI Industries

Number of large-cap funds holding the stock: 6

Sample of large-cap funds holding the stock: Invesco India Largecap, Tata Large Cap, and ITI Large Cap

8. Sona BLW Precision Forgings

Number of large-cap funds holding the stock: 6

Sample of large-cap funds holding the stock: Union Largecap, SBI BlueChip, and Sundaram Large Cap

9. FSN E-Commerce Ventures

Number of large-cap funds holding the stock: 6

Sample of large-cap funds holding the stock: Mirae Asset Large Cap, Tata Large Cap, and Mahindra Manulife Large Cap

10. Zydus Lifesciences

Number of large-cap funds holding the stock: 6

Sample of large-cap funds holding the stock: Kotak Bluechip, HSBC Large Cap, and Union Largecap

These companies, ranging from hospitality giants to precision forging firms, have caught the attention of large-cap funds seeking to diversify their portfolios and capitalize on emerging growth opportunities. While traditionally associated with stability and reliability, large-cap funds are now embracing a more dynamic approach, leveraging the growth potential offered by mid and small-cap segments.

By venturing into these non-traditional territories, large-cap funds aim to achieve a balance between risk and reward, harnessing the upside potential of promising companies while maintaining a solid foundation of established blue-chip stocks.

Investors, too, stand to benefit from this strategic shift in investment approach. By aligning their portfolios with large-cap funds that embrace diversification and innovation, investors can potentially optimize their returns and navigate the ever-changing landscape of the stock market with confidence.