Fishing & cashing on multibaggers

Mutual funds that caught hyper-growth stocks early and netted huge returns

For mere mortals, scouting for a potential multibagger is akin to a fishing expedition, an exercise reliant more on hope than expectation. Neither are mutual fund houses a bunch of crystal ballgazers. But given their years-long expertise, research techniques and time-tested methodologies, they are better placed at spotting multibaggers at an early stage.

The numbers back that up. Of the roughly 70 above `2,000 crore market-cap companies that have grown over five-fold (more than 400 per cent) since the start of 2018, mutual funds had caught 24 of them at an early stage. But when it came to investment size, most mutual funds fell short. In other words, while the funds had done the tough job of spotting multibaggers in the early days, the quantum of investment did not make a meaningful impact on their overall returns.