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Better risk-reward, FPI flows augur well for LargeCap MFs in 2024: Analysts

Valuation is comfortable for large-caps, but there is little margin of safety in the broader market categories, analysts said

mutual funds, MFs
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Nikita Vashisht New Delhi

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Amid stretched valuations and lack of positive triggers, analysts suggest investors lower their return expectations from mid-, and small-cap equity mutual funds in calendar year 2024.

They rather suggest investors rotate funds to large-cap equity mutual funds this year for relatively better returns.

"The valuation of mid-, and small-cap cohorts isn't very comfortable. Most of the positives are priced-in, and a large number of stocks are trading above their intrinsic value. By comparison, few large-cap stocks are trading at reasonable valuations. So, from a risk-return perspective, large-cap funds may generate lower-than-historical average returns in 2024, whereas mid-, and small-cap funds

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First Published: Jan 02 2024 | 1:37 PM IST

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