Baffling choices: Active fund managers refuse to touch these 13 mid-cap stocks in the stock market

Here are the 13 mid-cap stocks actively avoided by mutual fund managers—insights into ignored opportunities and hidden risks.

The Association of Mutual Funds in India (AMFI) classifies stocks ranked from 101 to 250 in terms of full market capitalisation as mid-caps. While some mid-cap stocks like Cummins India, Crompton Greaves Consumer Electricals, and The Federal Bank enjoy popularity among actively managed schemes in the stock market, there is a group of mid-cap stocks that are either entirely ignored or given the cold shoulder.

These stocks, often lacking a robust financial track record, strong management quality, business scalability, and attractive valuations, fail to secure a place in the portfolios of these funds.

• These 13 mid-cap stocks are shunned by active mutual fund managers.
• No active schemes held stocks of Indian Overseas Bank, UCO Bank, Vodafone IDEA, and more.
• General Insurance Corporation and Yes Bank had minimal investments.
• Lack of interest is due to financial records, management quality, and valuation.
• Negligible investment value and low market capitalisation are observed.

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The following table showcases the 13 mid-cap stocks, as defined by AMFI, that have garnered little to no interest from active mutual fund managers. The data includes the total number of active schemes holding the stock as of May 30, 2023, the respective MFs' investment value, and the BSE Full M-CAP as of July 7, 2023:

Although actively managed equity and hybrid funds were considered for this study, passive funds and arbitrage funds were excluded. The data is as of May 31, 2023, sourced from ACEMF.

Final thought

It is evident from the data that these mid-cap stocks have failed to capture the attention of active mutual fund managers. The absence of any active schemes holding these stocks and the lack of investment value indicate a significant reluctance to include them in portfolios. While some of these stocks may have their own individual challenges and risks, it is essential to conduct thorough research and analysis before making any investment decisions.

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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.