The Hindu Business Line : Mutual funds still stand by mid-caps

If investors in mutual funds feel miffed about the way mid-caps have lately performed, chances are they may not be glad to see the way these stocks are still occupying prime positions in equity funds' portfolios.

Mid-caps, in spite of everything, still account for a critical part of fund managers' overall asset allocations, going by the latest set of portfolio details that are available. The lesson, investment circles say, that can be derived from this is simple: fund managers are not willing to discount mid-cap counters, although some of them have in recent times pared their exposure to this segment in favour of large-cap stocks.

Sizeable proportions

A look at the end-November portfolio statements (of diversified equity funds) underlines the presence of mid-cap counters in sizeable proportions. In certain instances, these account for a high 35-40 per cent as well.

Fund houses cannot but track mid-caps closely, felt Mr Mihir Vora of HSBC MF, even while he acknowledged that these may not have satisfied all categories of investors, considering their recent performance. "Large caps have selectively turned out better," he noted, with reference to what has been delivered by some of the heavyweight counters.

A number of large-cap stocks, many of which make up mainline indices such as Nifty and Sensex, have advanced noticeably in the past few months, a trend that has not been missed by investors. The latter, including sections that had earlier set great store by mid-cap names, found that large-caps have ended up with a better show, MFs maintain.

Mr Sanjay Sinha of SBI MF too suggested that it would not be right for investors to get rid of mid-caps altogether. Some of these counters may well add value to portfolios at other times, he said, adding that investors who are convinced about their mid-cap allocations can actually consider stepping up their exposure at this juncture.

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