MFs focus on COs with strong earnings potential

As markets touched all-time highs amid high liquidity and positive flows from retail investors for the third consecutive month, fund managers adopted a stock- specific approach. In May, the broader market fared better than the Sensex. While the Sensex rose 6.7%, the S&P BSE Midcap Index appreciated by 7.16% and the S&P BSE Small-cap Index was up 8.93%.With the economy reopening after the second wave of Covid-19, fund managers turned to companies which have any one of the three key aspects associated with earnings growth — healthy growth in revenues in the March 2021 quarter, cost control by maintaining balance sheet strength, and improving demand situation in sectors in which they operate. Fund houses bought into select PSUs, energy, and automobile stocks during the month. 83532400
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