Synopsis
A recent report suggested that for the first time, the AUM of Midcap mutual fund schemes have gone above the AUM of large cap mutual fund schemes. There are two ways to look and interpret this. First, that too much money has gone into mid-cap mutual funds and it is time to be cautious. The other way to look at it is that finally mid-cap stocks have reached a level where institutional investors are able to find opportunities to invest and that is why they are coming with more schemes and more money is being collected in mid-cap schemes. Beside the above two, there is a third way to look at it, which is pragmatic: India’s growth story is incomplete without mid-cap as these are the companies which are either emerging or re-emerging with their operating matrix turning better due to a couple of factors.
While there are phases, where they come under pressure, the fact remains that in the last ten years best returns have come from mid-cap stocks. The top performing indices in the last ten years in one form or another are mid-cap indices. So, probably if one is not owning them, then the return even in the longest of the bull run will not be very high. One of the reasons why mid-cap stocks are able to do well when an economy like India grows at a
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