Mutual fund investors show bias towards riskier small-cap-oriented schemes

In March, inflows into small-caps highest among market cap-oriented fund categories

Abhishek KumarSamie Modak Mumbai

Illustration: Binay Sinha

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Notwithstanding sharp volatility in March, mutual fund (MF) investors didn’t fight shy of investing in riskier small-cap-oriented schemes. Inflows into small-cap funds were not just the highest in absolute terms, they were also the maximum as a proportion of assets under management (AUM) among all market capitalisation (m-cap)-oriented categories.
Investors funnelled Rs 2,430 crore down small-cap funds — 1.8 per cent of their AUM of Rs 1.33 trillion. Meanwhile, inflows into mid-cap schemes were 1.2 per cent of their AUM, while those into large-cap schemes were just 0.4 per cent of AUM.
“Active m-cap-based MF portfolios saw a much higher degree of buying by mid- and small-cap funds, compared to large-cap funds. This indicates a propensity to add ‘size risk’ by domestic investors,” wrote equity strategists Vinod Karki and Niraj Karnani of ICICI Securities in a note.

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First Published: Apr 20 2023 | 8:41 PM IST

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