April saw modest declines in small and mid cap mutual fund inflows, while sectoral and thematic funds surged 10x as investors shifted focus amid changing market trends.
Inflows in small and mid cap mutual funds dropped by 2% and 4% respectively in April on a month on month basis and received an inflow of Rs 3,999 crore and Rs 3.313 crore respectively.
Small cap funds witnessed a decline by Rs 92.17 crore and mid cap funds saw a decline by Rs 124.90 crore in rupee terms. On a year-on-year basis, the inflows have surged by 81% and 85% for small cap and mid cap funds respectively.
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The net assets under management (AUM) for both the categories has gone up by 4% each on a monthly basis.
“Smallcaps and midcap funds continue getting larger inflows compared to largecaps. Given that the largecaps are, typically, higher quality companies and are broadly available at a larger discount to their intrinsic values, it would have been better if investors allocated to them more. Interestingly, many large caps are also growing faster than many overvalued investor & fund manager favourites in the midcaps and smallcaps,” said Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital.
Inflows in large cap mutual funds surged by 8% to Rs 2,671 crore in April against Rs 2,479 crore in March and by Rs 192.15 crore in rupee terms. On the yearly basis, the inflows in large cap funds have gone up by 647%.
Small cap funds delivered an average return of around 2% in April with Franklin India Smaller Companies Fund being the topper which gave a return of 4.53% in the same period. Tata Small Cap Fund lost the most of around 1.09% in the mentioned time period.
On the other hand, mid cap funds gave an average return of 3.81% in April with Edelweiss Mid Cap Fund being the topper which gave 5.08% return in the same period. HSBC Midcap Fund gave 4.82% return in the same period.
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LIC MF Midcap Fund gave the lowest return of around 1.62% in the month of April.
“Investor sentiment held firm even as returns in small- and mid-cap segments turned negative over the 3–6 month period. Rather than exiting, investors strategically rotated capital, as evidenced by a remarkable 10-fold increase in inflows into sectoral and thematic funds,” said Feroze Azeez, Joint CEO, Anand Rathi Wealth.
The sectoral and thematic funds have witnessed a surge of over 1000% in the inflows. The category received an inflow of Rs 2,000 crore in April against an inflow of Rs 170.09 crore in March.
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The net assets under management (AUM) for both the categories has gone up by 4% each on a monthly basis.
“Smallcaps and midcap funds continue getting larger inflows compared to largecaps. Given that the largecaps are, typically, higher quality companies and are broadly available at a larger discount to their intrinsic values, it would have been better if investors allocated to them more. Interestingly, many large caps are also growing faster than many overvalued investor & fund manager favourites in the midcaps and smallcaps,” said Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital.
Inflows in large cap mutual funds surged by 8% to Rs 2,671 crore in April against Rs 2,479 crore in March and by Rs 192.15 crore in rupee terms. On the yearly basis, the inflows in large cap funds have gone up by 647%.
Small cap funds delivered an average return of around 2% in April with Franklin India Smaller Companies Fund being the topper which gave a return of 4.53% in the same period. Tata Small Cap Fund lost the most of around 1.09% in the mentioned time period.
On the other hand, mid cap funds gave an average return of 3.81% in April with Edelweiss Mid Cap Fund being the topper which gave 5.08% return in the same period. HSBC Midcap Fund gave 4.82% return in the same period.
Also Read | Equity MF inflows dip 3% to Rs 24,269 crore in April as investors turn to debt
LIC MF Midcap Fund gave the lowest return of around 1.62% in the month of April.
“Investor sentiment held firm even as returns in small- and mid-cap segments turned negative over the 3–6 month period. Rather than exiting, investors strategically rotated capital, as evidenced by a remarkable 10-fold increase in inflows into sectoral and thematic funds,” said Feroze Azeez, Joint CEO, Anand Rathi Wealth.
The sectoral and thematic funds have witnessed a surge of over 1000% in the inflows. The category received an inflow of Rs 2,000 crore in April against an inflow of Rs 170.09 crore in March.
