Amfi Data shows that small-cap funds saw net inflows of Rs 4,495.13 crore in October—the highest among all categories on equity-oriented schemes
The BSE SmallCap index, which is looked upon as the barometer of the performance of the small-cap universe, is up more than 32 per cent in the current calendar year. This is significantly higher than the rise of the benchmark Sensex that is up less than 7 per cent in 2023 till date.
The surge in the small-cap arena made a large section of market participants, especially mutual funds, wary of putting in more money in the segment with a few fund houses temporarily halting taking in lump sum investments in small-cap schemes.
While it led to a temporary blip in the inflows in the small-cap schemes last month, the latest data shows that investors have once again started betting big on the small-cap segment.
Data from the Association of Mutual Funds in India (AMFI) shows that small-cap funds saw net flows of Rs 4,495 crore in October, much higher than the previous month’s net flows of Rs 2,678.47 crore—small-cap funds had registered strong inflows of nearly Rs 4,265 crore in August.
Incidentally, small cap funds accounted for the largest share of inflows within the category of equity-oriented schemes in October.
More importantly, small cap funds have been attracting a lot of investor attention in the last few months. For instance, AMFI data shows that the net inflow in small cap funds was pegged at a record Rs 5,472 crore in June.
AMFI Chief Executive N.S. Venkatesh attributes the trend to investors believing that there is still upside left in the segment even though he said that investors should be cautious in their investment approach.
“Essentially, we are seeing flows in small cap funds because investors still believe that there is ability to make gains because the valuations have corrected substantially and is now again going up. Some retail investors believe there is enough juice left and hence the money is coming in,” said Venkatesh.