Mutual funds are significantly investing in mid-caps and small-caps despite their weak performance, and the risks associated with volatility of smaller companies. According to data released by the Association of Mutual Funds in India (Amfi), while net inflow into large-cap funds in April stood at ₹48.27 crore, for mid-cap funds it was at ₹491.04 crore, and for small-cap funds it stood at ₹955.83 crore. For the first time, Amfi has released granular monthly data for investments by mutual fund houses.
Mutual funds’ preference for mid- and small-caps over large-caps comes at a time when the BSE MidCap and BSE SmallCap indices have been under pressure. BSE MidCap fell 8.56%, while BSE SmallCap lost 6.29% so far in 2019, after slipping 13.38% and 23.53%, respectively, in 2018.
