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(From Business Line)
INVESTING in mid-cap stocks in a volatile market is always a perilous exercise. After a dream run in 2003, the mid-cap stocks got hammered in the recent choppy market.
Nothing illustrates this better than the decline in the CNX Mid-Cap 200 Index, which fell 12.4 per cent in the January-March quarter while the S&P CNX Nifty fell just 6.3 per cent.
Against this must be seen the fact that the mid-cap stocks appreciated 43.2 per cent in October-December 2003.
Not even the savvier institutional investors have escaped the ill effects of a downturn in the stock market for these stocks.
Mutual funds that had invested heavily in mid-cap stocks too suffered during January-March 2004. An analysis of such funds has shown that:
* Funds such as Franklin Prima and Sundaram Select Mid-Cap, which invested exclusively in mid-cap stocks, sank to the bottom of the "returns" pile, their NAVs (net asset values) plunging 13-16 per cent.
* Diversified equity funds which invested substantially in mid-caps - Taurus Discovery and …