According to the Association of Mutual Funds of India (AMFI), average and small cap funds received inflows of Rs 32,924 crore during the same period a year ago.
“Investments in mid- and small-cap funds should be made based on one’s risk appetite. It is important for investors to keep in mind that the mid-cap and small-cap segments are very volatile. While they can offer exceptionally high returns in bull markets, they can fall just as hard in bear markets. Therefore, investors should take exposure to these funds according to their risk appetite and invest only with a long-term investment horizon,” said Melvyn Santarita, Analyst – Research Manager, Morningstar Investment Research India.
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“I expect inflows to continue as Indians want to invest in high-growth sectors. Small-cap funds should be seen as an integral part of portfolio allocation and not a tactical play,” the CEO of Trust Mutual Fund, Sandeep Bagla.
In FY25 so far, mid cap funds recorded an inflow of Rs 14,756 crore and the highest inflow received in September was Rs 3,130 crore. Small cap funds attracted Rs 15,586 crore and the highest inflow received in August was Rs 3,209 crore. The midcap and smallcap indices have risen by 24% and 25% respectively in this financial year. In FY25 (up to September 2024), midcap and smallcap funds delivered an average return of 26.29% and 26.25% respectively. Additionally, a stress test in March 2024 has increased confidence in fund managers’ ability to handle market volatility. “The projected growth rates for midcap and smallcap funds are 20% and 25%, respectively, for FY25,” Anand Rathi Wealth Deputy CEO Feroze Azeez told PTI.
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Among the other categories of diversified equity mutual funds, multi-cap and soft-cap funds have attracted an inflow of Rs 23,145 crore and Rs 8,167 crore, respectively, in the said period. Large cap mutual funds saw an inflow of Rs 7,067 crore during FY25 April-September, compared to an outflow of Rs 5,700 crore in the same period of FY24.
The number of investors (folios) increased by 1.32 crore year-on-year to around 4 crore as on September 30, 2024, PTI reported.
Overall, assets under management in midcap and smallcap schemes stood at Rs 3.97 lakh crore and Rs 3.28 lakh crore respectively as on September 30, 2024.
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