The art of finding the proverbial needle in the haystack is a toughie
30-May-2023 •Ashish Menon
Hunting for potential multi-baggers is one of the most thrilling activities for investors. It's no different for mutual fund houses, either.
Although 46 company stocks have grown 100-fold since April 1, 2013, fund houses managed to ride the price boom in six from its relatively early days.
True, six out of 46 looks like a below-average performance, but we'd like to state that spotting a potential 100-bagger is as demanding as finding a fallen wedding ring on a beach.
Add to that the small matter of a fund's staying power. While hindsight is always 20-20, keeping your trust in a booming stock over a significant period of time is quite the challenge. In a mutual fund's case too, they may either cool off or dilute their interest.
Now that you know how tough it is to spot early and stick with a skyrocketing stock, here is a list of mutual funds that accomplished both in the last ten years.
| Company | Growth since Apr '13 | Spotted by (first bought) | Growth since spotted |
|---|---|---|---|
| Avanti Feeds | 139x | SBI Small Cap (Nov 2013) | 63x |
| Deepak Nitrite | 110x | Union Small Cap (Apr 2015) | 42x |
| HLE Glascoat | 202x | Quant Active Fund and Infrastructure Fund* (Jul 2014) | 139x |
| Indo Count Industries | 148x | UTI Mid Cap (Apr 2013) | 139x |
| Navin Fluorine International | 111x | Nippon India Small Cap (Apr 2013) | 106x |
| Tata Elxsi | 109x | Axis Midcap, HDFC Prudence, Tata Dividend Yield (Apr 2013) | 110x** |
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Note: For the period April 1, 2013 to March 31, 2023. *Investment was made by erstwhile Escorts mutual fund. **Since we do not know when it was purchased in April 2013, the average adjusted closing price for the month has been considered, which was lower than the price as on April 1, 2013 |
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Observations
Therefore, spotting a 100-bagger is one thing, allocating more money in them is another.
In the following story, we will list the funds' that had a higher allocation in a 100-bagger, which eventually resulted in outsized returns for investors.
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