When large institutional investors like mutual funds put money into a stock, it’s often a signal worth paying attention to. These funds carry out extensive research and focus on long-term growth, investing only when there’s strong reasoning behind it. But what happens when some of their most favored stocks plummet by as much as 55% from their highs?
Despite ongoing market volatility, several well-owned Nifty500 stocks have taken a hit. Interestingly, mutual funds haven’t retreated—instead, they’ve been steadily increasing their holdings in 147 Nifty500 stocks over the past three quarters. Among these, 54 stocks have already delivered double-digit returns in CY25. But today, we turn our attention away from the winners to the underperformers. Around 44 mutual fund-backed stocks have fallen more than 25% from their 52-week highs, with the eight biggest losers dropping between 40% and 55%. Such steep declines can test even the most patient investors. Are these sharp corrections a chance for savvy bottom-fishing, or a cautionary signal to stay wary? Only time will tell. (Data Source: ACE Equity).
