Investors are increasingly piling into riskier small- and mid-cap mutual funds while moving away from index-linked large-cap funds, tempted by strong recent performance in the broader market.
Large-cap funds have seen net outflows for two consecutive months. In August, the category saw an outflow of ₹1,147 crore, following a net outflow of ₹1,321 crore in July, according to data from the Association of Mutual Funds in India (AMFI).
In contrast, small-cap and mid-cap funds continued to attract strong flows. Small-cap funds recorded their highest monthly inflow in two years at ₹7,973 crore in August. Mid-cap funds also saw strong inflows of ₹6,989 crore, their highest in two years.
Viraj Gandhi, chief executive officer (CEO) of Samco Mutual Fund, said small-cap schemes collected well above their 12-month average monthly inflow of ₹4,946 crore in August. Mid-cap schemes also recorded collections significantly above their 12-month average of ₹4,946 crore during August.
“In contrast, large-cap schemes have fallen from a monthly collection of ₹1,176 crore over the past 12 months to an outflow in August,” Gandhi said.