MFs' bets on new firms pay off

Domestic fund managers have been adding shares of little-known companies to their portfolios, amid strong investor flows. In the past two years, the universe of stocks with mutual fund exposure has gone up. This year itself, about 60 new stocks have been added. An analysis of the stock price performance shows that bets on several small-cap companies have yielded robust returns. Majority of them have outperformed the benchmark indices in terms of year-to-date returns. Stocks like V2 Retail, Gravita India, Geojit Financial Services and Shakti Pumps have turned out to be multi-baggers. According to fund managers, these stocks will help the schemes generate reasonably better returns. Most fund houses have expanded their research coverage to over 500 stocks now. So far this year, equity schemes have seen inflows of Rs 1.2 lakh crore — close to half of which have come through systematic investment plans.