According to Morningstar India, mid-cap funds constituted 11% of the overall equity fund assets under management in 2014; this moved up to 16% in 2015 and currently stands at 20%. Mid- and small-cap funds have been getting a lot of inflows as compared to large-cap flows. Are we building ourselves a bubble in the mid-cap space? Are investors unfairly ignoring large-cap stocks at the cost of mid-cap stocks? Anand Radhakrishnan, chief investment officer-Franklin Equity, Franklin Templeton Investments—India, who manages Franklin Templeton’s large-cap oriented funds puts things in perspective in a chat with Mint. Edited excerpts:
People have been investing a lot in mid- and small-cap stocks in the past couple of years. Few seem to be attracted to large-cap stocks at present. Is there danger in this approach?
On the one hand, widening of the market is good. We want more companies to get listed, more sustainable businesses to emerge, markets to be accommodative of small- and mid- sized companies that are new or niche businesses, and are capable of growing.
