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An analysis of the top stocks commonly held between Large and Multi cap funds.
Diversification of a portfolio has proven to be the smartest way of reducing the risk factor in a fund. Mutual funds do a good job of this by investing their corpus into a large number of securities depending on the scheme’s investment strategy. However, on performing a quick analysis on stocks held by all large cap and multi cap funds in the industry over a year, we found the results to be quite thought provoking. Our sample consisted of 70 large cap and 51 multi cap funds based on the classification as per NAV India. The time period for the analysis is September 2014 to August 2015. Initially, we checked for stocks held in both the categories for the entire 12 months of analysis. Further, we went onto identify the number of funds holding these stocks over the last 1 year so as to find out the most popular picks. Table 1: Top 10 most widely held stocks in Large Cap and Multi Cap Categories over a 12 month period.
Interestingly, it can be seen that 8 out of the top 10 widely held stocks were common between the large and multi cap funds. Below is a chart showing how these stocks have performed over the last 3 and 5 years.
Table 2: Estimated earnings and Forward PE of the most commonly held stocks in large and multi cap portfolios
Mutual Funds Exposure into the 8 stocks Table 3 & 4: Large and Multi Cap Funds having a maximum holding in the 8 stocks over the last 1 year
The widely held stocks in large cap and multi cap categories clearly indicate that these have become the favourite picks of a majority of fund managers. The performance of these top stocks becomes crucial for the fund’s performance over the course of the next few months. |
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iFAST Research Team is part of iFAST Financial India Pvt Ltd. |
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Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website. |
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