Mid-cap and Small-cap Mutual Funds Attract Over Rs 30,000 Crore in 6 Months

Strategic Insights -

India's mid-cap and small-cap mutual funds have seen significant investor interest, with inflows of approximately Rs 30,350 crore in the first half of the current financial year (FY25). This interest is primarily driven by the impressive returns delivered by these funds, which have outperformed both the Nifty and large-cap indices. Mid-cap funds received an inflow of Rs 14,756 crore, while small-cap funds attracted Rs 15,586 crore in the first half of FY25, totaling Rs 30,342 crore.

Key Takeaways:

  • Mid-cap and small-cap mutual funds received inflows of approximately Rs 30,350 crore in the first half of FY25, indicating strong investor interest.
  • Mid-cap funds received an inflow of Rs 14,756 crore, while small-cap funds attracted Rs 15,586 crore in the first half of FY25.
  • Mid-cap and small-cap indices have outperformed both the Nifty and large-cap indices this financial year, posting gains of about 20 per cent and 24 per cent, respectively.
  • Despite Sebi's concerns regarding heightened inflows into small-cap and mid-cap funds, experts believe that investors will continue to favor these categories due to their potential for high returns.
  • Small-cap funds should be seen as an integral part of one's portfolio allocation and not a tactical play, according to Trust Mutual Fund CEO Sandeep Bagla.
  • Feroze Azeez, deputy CEO of Anand Rathi Wealth Ltd, highlighted that the stress test in March 2024 contributed to investor confidence by ensuring that fund managers are prepared to handle market volatility.
  • Large-cap mutual funds also registered an inflow of over Rs 7,067 crore in the April-September period of FY25, a significant improvement from the outflow of Rs 5,700 crore in the same period of FY24.
  • The number of investors (folios) in mid-cap and small-cap schemes increased by 1.32 crore year-on-year to nearly 4 crore in the six months period ended September 30.
  • The assets of mid-cap and small-cap schemes combined rose 63 per cent to Rs 7.26 lakh crore at the end of September 2024 from Rs 4.44 lakh crore a year earlier.

Statistics:

  • Rs 30,350 crore: Total inflows into mid-cap and small-cap mutual funds in the first half of FY25.
  • Rs 14,756 crore: Inflows into mid-cap funds in the first half of FY25.
  • Rs 15,586 crore: Inflows into small-cap funds in the first half of FY25.
  • 20 per cent: Gain posted by mid-cap indices this financial year.
  • 24 per cent: Gain posted by small-cap indices this financial year.
  • Rs 32,924 crore: Cumulative inflow into mid-cap and small-cap funds in the first half of FY24.
  • 1.32 crore: Increase in the number of investors (folios) in mid-cap and small-cap schemes year-on-year.
  • Rs 4 crore: Number of investors (folios) in mid-cap and small-cap schemes in the six months period ended September 30.
  • Rs 7.26 lakh crore: Assets of mid-cap and small-cap schemes combined at the end of September 2024.
  • Rs 4.44 lakh crore: Assets of mid-cap and small-cap schemes combined a year earlier.

Sources:

  • Association of Mutual Funds in India (Amfi)
  • Times of India (TOI)
  • Anand Rathi Wealth Ltd
  • Trust Mutual Fund