Mid-Cap and Small-Cap Mutual Funds Surge with Rs 30,350 Crore in Inflows Amid Strong Investor Confidence

The mid-cap and small-cap mutual fund segments are experiencing a significant surge in both inflows and investor accounts, reflecting strong investor confidence and interest. Here’s a summary of the key points:

1. Investor Accounts Surge: The number of folios in mid-cap and small-cap schemes has increased by 1.32 crore year-on-year, totaling nearly 4 crore by September 30, 2024.
2. Strong Inflows: These schemes attracted around Rs 30,350 crore in inflows during the first half of FY25 (April to September), showing resilience despite regulatory warnings from SEBI regarding the risk of surging investments. Last year’s inflows during the same period were Rs 32,924 crore.
3. Performance: The mid-cap and small-cap indices have outperformed larger indices, recording gains of approximately 20% and 24%, respectively, this fiscal year.
4. Expert Insights: Industry experts believe that investors will continue to favor these funds due to their high return potential, with projections suggesting growth rates of 20% for mid-cap and 25% for small-cap segments in FY25.
5. SIP Contributions: Systematic Investment Plans (SIPs) are reaching new highs, further contributing to the inflows into these funds.
6. Contrast with Large-Cap Funds: While mid-cap and small-cap funds are thriving, large-cap mutual funds saw inflows of over Rs 7,067 crore, recovering from last year’s outflow of Rs 5,700 crore.
7. Risk Considerations: There are cautions from some experts regarding potential market corrections, which could impact future inflows into these segments.
8. Asset Growth: The assets under management (AUM) for mid-cap and small-cap schemes rose by 63%, reaching Rs 7.26 lakh crore compared to Rs 4.44 lakh crore a year ago.

This trend indicates a robust appetite for high-growth investment opportunities among Indian investors, despite some inherent risks in the market.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Investment in mutual funds involves risks, including the potential loss of principal. Past performance is not indicative of future results. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making investment decisions. The author and publisher do not assume any liability for any losses or damages arising from the use of this information.