Despite markets rising in October, monthly inflows into large, mid, and small-cap mutual funds dropped in October by up to 58%. Mutual fund experts noted that while mid-cap and small-cap funds continued to record positive inflows, the pace moderated compared to September as valuation concerns and market volatility prompted investors to shift toward more diversified or large-cap-oriented strategies.
“Mid-cap (Rs 3,807 crore) and small-cap (Rs 3,476 crore) categories continued to see positive but slower inflows versus September as froth/valuation concerns and recent volatility nudged investors toward more diversified or large-cap-tilted exposure,” said Himanshu Srivastava, Principal Research, Morningstar Investment Research India.
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According to the monthly data by Association of Mutual Funds in India (AMFI), large cap funds saw a decline of 58% in the monthly data to Rs 971 crore in October compared to an inflow of Rs 2,319 crore in September.
Mid caps and small caps saw a decline of 25% and 20% respectively in the monthly inflows. Mid cap funds received an inflow of Rs 3,807 crore in October compared to an inflow of Rs 5,085 crore in September. Small cap funds received an inflow of Rs 3,476 crore in October compared to an inflow of Rs 4,362 crore in September.
Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) said that inflows across small cap, midcap, and large cap categories have dipped, partly on account of profit booking and a cautious stance amid range-bound markets.
In October, large cap funds gave an average return of 3.07% with Bajaj Finserv Large Cap Fund offering the highest return of 4.05% among 33 large cap funds in the said time period.
Mid cap funds delivered an average return of 3.19% in October with Sundaram Mid Cap Fund offering the highest return of 4.53% among 31 mid cap funds in the said time period. Small cap funds offered an average return of 2.81% in the said time period and TRUSTMF Small Cap Fund gave the highest return of 5.09% among 31 small cap funds.
The historical data shows that inflows in largecap funds declined by 18% to Rs 2,319 crore in September against an inflow of Rs 2,834 crore in August. Monthly inflows in midcap went down by 5% to Rs 5,085 crore compared to Rs 5,330 crore in August. And lastly, the inflows in smallcap funds dipped by 13% to Rs 4,362 crore compared to Rs 4,992 crore in August.
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In August, though the inflows in the largecap and midcap category increased, the inflows in small caps declined by 23% compared to the month of July. Largecap and midcap funds witnessed a surge of 33% and 3% respectively, in the monthly inflows.
“We are seeing declining inflows to Equity funds since August, this is driven by multiple factors like Profit Booking, Cautious Investor sentiment due to Global policy uncertainties and Tariff overhang. Investors are looking at safer options like Debt and Hybrid funds,” said Ankur Punj MD – Business Head Equirus Wealth.
In October, BSE Sensex and Nifty50 gained 3.65% and 3.57%. Nifty Midcap 150 - TRI and Nifty Smallcap 250 - TRI gained 3.91% and 2.66% respectively in the same time period.
Sandeep Bagla, CEO, TRUST Mutual Fund recommends investors to remain invested in Indian equities as earnings are looking to pick up and global central banks are unlikely to reduce their balance sheets which should be positive for risky assets.
“Mid-cap (Rs 3,807 crore) and small-cap (Rs 3,476 crore) categories continued to see positive but slower inflows versus September as froth/valuation concerns and recent volatility nudged investors toward more diversified or large-cap-tilted exposure,” said Himanshu Srivastava, Principal Research, Morningstar Investment Research India.
Also Read | HDFC Defence Fund increase stake in Bharat Forge, Eicher Motors and 1 other, trims exposure in 4 stocks in October
According to the monthly data by Association of Mutual Funds in India (AMFI), large cap funds saw a decline of 58% in the monthly data to Rs 971 crore in October compared to an inflow of Rs 2,319 crore in September.
Mid caps and small caps saw a decline of 25% and 20% respectively in the monthly inflows. Mid cap funds received an inflow of Rs 3,807 crore in October compared to an inflow of Rs 5,085 crore in September. Small cap funds received an inflow of Rs 3,476 crore in October compared to an inflow of Rs 4,362 crore in September.
Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) said that inflows across small cap, midcap, and large cap categories have dipped, partly on account of profit booking and a cautious stance amid range-bound markets.
In October, large cap funds gave an average return of 3.07% with Bajaj Finserv Large Cap Fund offering the highest return of 4.05% among 33 large cap funds in the said time period.
Mid cap funds delivered an average return of 3.19% in October with Sundaram Mid Cap Fund offering the highest return of 4.53% among 31 mid cap funds in the said time period. Small cap funds offered an average return of 2.81% in the said time period and TRUSTMF Small Cap Fund gave the highest return of 5.09% among 31 small cap funds.
The historical data shows that inflows in largecap funds declined by 18% to Rs 2,319 crore in September against an inflow of Rs 2,834 crore in August. Monthly inflows in midcap went down by 5% to Rs 5,085 crore compared to Rs 5,330 crore in August. And lastly, the inflows in smallcap funds dipped by 13% to Rs 4,362 crore compared to Rs 4,992 crore in August.
Also Read | JioBlackRock Flexi Cap Fund: HDFC Bank and RIL among top 10 stock holdings in October
In August, though the inflows in the largecap and midcap category increased, the inflows in small caps declined by 23% compared to the month of July. Largecap and midcap funds witnessed a surge of 33% and 3% respectively, in the monthly inflows.
“We are seeing declining inflows to Equity funds since August, this is driven by multiple factors like Profit Booking, Cautious Investor sentiment due to Global policy uncertainties and Tariff overhang. Investors are looking at safer options like Debt and Hybrid funds,” said Ankur Punj MD – Business Head Equirus Wealth.
In October, BSE Sensex and Nifty50 gained 3.65% and 3.57%. Nifty Midcap 150 - TRI and Nifty Smallcap 250 - TRI gained 3.91% and 2.66% respectively in the same time period.
Sandeep Bagla, CEO, TRUST Mutual Fund recommends investors to remain invested in Indian equities as earnings are looking to pick up and global central banks are unlikely to reduce their balance sheets which should be positive for risky assets.
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