Smallcap fund’s dominance continues in the Indian market, new record made, know why investors’ confidence increased
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Small Cap Funds: The confidence of Indian investors is increasing on small cap funds. This information has been received from the data released by the Association of Mutual Funds in India (AMFI). The asset base of the smallcap mutual fund category crossed Rs 2 lakh crore at the end of November, a year-on-year growth of 69 per cent, driven by strong, consistent net inflows and favorable market conditions. Data from Amfi, the national body of mutual fund companies, shows that on a monthly basis, the assets under management (AUM) of this fund category that invests in small companies increased by 10 percent to Rs 1.99 lakh crore. The smallcap mutual segment has seen unprecedented growth in AUM driven by record net inflows coupled with favorable market activities since Q4FY2019-20. Till November this year, Rs 37,178 were invested in smallcap fund schemes. This includes a record investment of Rs 3,699 crore last month and Rs 4,495 crore in October. On the other hand, the largecap fund category has seen a net outflow of Rs 2,688 crore in the first 11 months of this year.
Rs 2.2 lakh crore invested in small cap mutual funds
According to Association of Mutual Funds in India (Amfi) data, the asset base of smallcap mutual funds reached an all-time high of Rs 2.2 lakh crore at the end of November. The number of investor accounts in this category also increased to 1.6 crore in November which was 97.52 lakh a year ago. This shows that the inclination of investors has increased towards small cap funds. Under market regulator SEBI rules, fund managers in small cap mutual funds are required to invest at least 65 percent of their portfolio in small stocks. Union Asset Management Company Chief Executive Officer G Pradeep Kumar suggested that investors should reduce their investments in smallcap and midcap funds in view of the fear of short-term volatility. Overall, the total assets under management of the mutual fund industry comprising 42 companies stood at Rs 49.04 lakh crore at the end of November, 22 per cent higher than Rs 40.37 lakh crore a year ago.
Market continues to rise
The Indian stock market has also remained bullish for the last few sessions. The Sensex based on 30 shares opened with a rise in early trading and reached 70,057.83 points during trading. Later, it closed at 69,928.53 points with a rise of 102.93 points or 0.15 percent. Out of 30 Sensex stocks, 18 were in profit while 11 were in loss. There was no change in one. NSE Nifty based on fifty shares also reached 21,026.10 points during trading. Finally, it closed at the highest ever level of 20,997.10 points with an increase of 27.70 points or 0.13 percent. Among Sensex stocks, UltraTech Cement gained the most by 3.04 percent. Apart from this, Nestle, Power Grid, Tata Motors, IndusInd Bank, HCL Tech, TCS, Tech Mahindra, NTPC, ITC, JSW Steel and Tata Steel were among the gainers. On the other hand, loss-making stocks include Axis Bank, Mahindra & Mahindra and Hindustan Unilever, Maruti, Bajaj Finserv, Bharti Airtel, HDFC Bank and Infosys.
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