Over the past eight consecutive quarters, Mutual Funds (MFs) have steadily increased their holdings in around 36 companies from the BSE 1000 universe, taking March 2024 as the base period. Such sustained accumulation often catches the attention of retail investors, as MF investment decisions are typically backed by extensive research, detailed company interactions, and long-term conviction.
Rising institutional ownership often boosts investor confidence and has historically delivered strong outcomes. Among these 36 companies, 11 stocks returned 25% to 250% over the past two years, with two more than doubling investor wealth.
However, consistent MF buying is not a guaranteed formula for success. A few stocks have underperformed despite rising institutional ownership. In fact, four of these companies declined by more than 30% over the last two years, reminding investors that while institutional accumulation can be a strong positive signal, company fundamentals and market conditions ultimately determine stock performance. (Data Source: ACE Equity).