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Investors pour into small and mid-cap funds, pulling back from large-cap
In August, small-cap funds drew the highest monthly inflow in two years at ₹7,973 crore, while large-cap funds saw two straight months of net outflows totaling ₹2,468 crore.
Investors are shifting toward higher risk, small and mid-cap mutual fund categories after a rebound in underlying stocks, data cited by LiveMint shows. According to the Association of Mutual Funds in India, large-cap funds recorded net outflows of ₹1,147 crore in August, after a ₹1,321 crore outflow in July.
Small-cap funds posted their strongest inflow in two years, with ₹7,973 crore in August. Mid-cap funds also attracted heavy inflows of ₹6,989 crore, their highest in two years, as allocations moved away from index-linked large-cap options.
Samco Mutual Fund CEO Viraj Gandhi said small-cap schemes collected well above their 12-month average monthly inflow of ₹4,946 crore in August. He added that mid-cap schemes also exceeded their 12-month average of ₹4,946 crore during the month, characterizing the flow as performance chasing.
LiveMint also pointed to the market backdrop, noting that since 1 April the Nifty Smallcap 250 index has returned 24.97% and the Nifty Midcap 250 index has gained 15.71%, compared with 3.32% for the Nifty 50.
Gandhi attributed the renewed appetite to a broader opportunity set, saying many companies and segments have grown faster than in the recent past, following a period when small and mid-cap stocks had stagnated.