Investors take midcap picks via MFs
As per May figures, renewed inflows as well as an appreciation in portfolio value has boosted the asset base of mid and small-cap schemes by 18-30%.The idea is to invest in these scheme with a very short-term view, say three to five weeks. When the investor touches a preset target (about 20 to 25%), he’ll redeem his investments.
Even if the investor pays 2% exit load for prematurely redeeming his fund investments, he’s still making good money. Moreover, the investor is free from traps like illiquid counters or rigged stocks.
Having burnt their fingers in small and mid-cap shares last year, retail investors have taken a more cautious approach this time: they are playing the mid-cap rally through the mutual fund route. Market watchers say this could further fuel the rally in secondline stocks, as fund managers will have to deploy the money collected through this schemes, even if it means having to chase prices.
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