When big institutional investors like mutual funds invest in a stock, it’s usually a sign that the stock is worth noticing. Mutual funds conduct extensive research and focus on long-term growth, so they invest only with sound reasoning. So, what happens when some of their favorite stocks nosedive by as much as 50% from their peak?
Amid ongoing market uncertainty, several well-owned stocks in the Nifty500 have taken a beating. But interestingly, mutual funds haven’t backed away. In fact, they’ve been doing quite the opposite—steadily increasing their stake in 141 stocks from the Nifty500 index over the past three quarters. Over half of these have rewarded investors with positive returns so far in CY25. But today, we focus not on the winners, but the worst performers from that list.
Roughly 40 MF-backed stocks have dropped over 25% from their 52-week highs, with the top 10 laggards sliding anywhere between 40% to 50%. That’s a steep fall—even for long-term believers. Are these sharp corrections a golden bottom-fishing opportunity, or a warning sign that investors should be cautious about? Only time will tell. We break down the top 10 most beaten-down MF favorites. (Data Source: ACE Equity).