How MFs churned large caps, mid-caps, and small caps in March 2026

How MFs churned large caps, mid-caps, and small caps in March 2026

Here is a quick look at how mutual funds churned their portfolios in March 2026. We look at a macro picture of specific large cap, mid-cap, and small cap stocks bought and sold, without getting into the specific actions of individual mutual fund AMCs. All shareholding changes are represented in terms of (lakhs of shares), and ranked on percentage change.

MUTUAL FUNDS - LARGE CAP CHURN IN MARCH 2026

The table below captures the 5 large cap stocks seeing the biggest increase in MF holdings and the 5 large cap stocks seeing the biggest fall in holdings in March 2026.

If you look at the intensity of buying versus selling in the large caps, the intensity is biased towards buying. That is not surprising considering that most stocks were available cheap amid the correction due to the US-Iran war. The big picks seem to have a strong bent of energy and realty development. On the energy front, MF money is veering toward new energy. On the realty front, the MF money is veering towards the bigger realty names, who are expected to benefit from consolidation in the industry.

What about the MF selling? It was clearly subdued. However, downstream oil did see some selling as they are likely to see pressure on margins with higher crude prices and market prices of petrol and diesel remaining static. The selling in Polycab appears to be more due to corporate governance concerns after the company faced tax investigations. Valuations of Polycab have also been fairly elevated.

MUTUAL FUNDS - MID CAP CHURN IN MARCH 2026

The table below captures the 5 mid-cap stocks seeing the biggest increase in MF holdings and the 5 mid-cap stocks seeing the biggest fall in holdings in March 2026.

If you look at the intensity of buying versus selling in the mid-caps, the intensity was once again biased towards buying. Even mid-caps were available at attractive prices in the month of March, which triggered the buying. There was no sectoral theme on the buy side for mutual funds, although there appeared to be a preference for PSU stocks.

What about the MF selling? It was clearly subdued, compared to the buying. However, energy did see selling pressure due to the supply chain constraints created by the US-Iran war. In fact, 3 out of the 5 top selling stocks of mutual funds were from the energy sector. Mid-cap energy was seen to be a lot more vulnerable than large cap energy.

MUTUAL FUNDS - SMALL CAP CHURN IN MARCH 2026

The table below captures the 5 small cap stocks seeing the biggest increase in MF holdings and the 5 small cap stocks seeing the biggest fall in holdings in March 2026.

A small word of caution when looking at small caps. In many cases, the base is very low, so the percentage change may look inflated. While there appears to be a bias towards shipping and defence services on the buy side, the sell side is more bottom-up, with no clear sectoral trend visible in the small cap space.

What is the overall picture that emerges from the fund buying and selling across capitalization? The bias was clearly on the buy side at more reasonable prices. In a month when FPIs were heavily selling, the mutual funds provided the support. One hopes that their brave call turns out to be correct!