Small-cap mutual fund inflows moderate by 10% in February amid large-scale redemption

The inflows into mid-cap schemes also declined by 12% to ₹1,808 crore. [View in browser]( [See all newsletters]( 09 March 2024 Small-cap mutual fund inflows moderate by 10% in February amid large-scale redemption [Venkat Chalasani, CEO of AMFI, said the intention of the regulator and the industry is not to stop inflow into small-cap funds but to enhance disclosure and transparency so that investors can make informed decisions while investing in these funds.] Inflows into small-cap mutual fund schemes moderated by 10 per cent last month to ₹2,922 crore against ₹3,257 crore in January due to large-scale redemption amid concern over high valuation and strong signals from SEBI on the froth developing in these schemes. Also read: [AMFI calls for stress test on mid, small-cap schemes]( The redemption from small-cap schemes increased five per cent to ₹3,975 crore last month against ₹3,777 crore logged in January, according to the Association of Mutual Funds in India data released on Friday. Inflows into the mid-cap schemes also declined 12 per cent to ₹1,808 crore (₹2,061 crore). Overall equity inflows were up at ₹26,866 crore (₹21,781 crore) on the back of robust new fund offers, which collected ₹11,720 crore (₹6,817 crore). Venkat Chalasani, CEO of AMFI , said the[intention of the regulator and the industry is not to stop inflow into small-cap funds]( but to enhance disclosure and transparency so that investors can make informed decisions while investing in these funds. The recent measures taken around mid- and small-cap funds are an ongoing process and part of the risk management framework, which considers liquidity, volatility and transparency, he added. “I believe inflows into small-cap funds will continue in a calibrated manner after proper disclosure by the fund houses and individual mutual fund will take the call on how to handle it based on their own assessment,” he said. If the risk management of other schemes calls for disclosures like that of small caps, they will be taken after discussion in the risk management committee meeting, said Chalasani, as the ultimate aim of the industry is to protect investors’ interests. Large-cap schemes growth Interestingly, investments in large and mid-cap schemes increased to ₹3,157 crore (₹2,330 crore) while thematic stole show with an inflow of ₹11,263 crore (₹2,330 crore) aided by five new fund offers collecting ₹7,178 crore. Melvyn Santarita, Analyst at Morningstar Investment, said the dip in small-cap inflows was due to redemptions which were the third largest among the equity schemes, as investors opted to book profits on this category’s better performance . SIP inflows rise Inflows through the Systematic Investment Plan were up at ₹19,186 crore (₹18,838 crore), with the highest-ever SIP assets under the management of ₹10.52 lakh crores (₹10.27 lakh crore). Investments in debt funds fell to ₹63,809 crore (₹76,469 crore). The total AUM of mutual funds was up three per cent last month at ₹54.54 lakh crore compared to ₹52.74 lakh crore in January. Also read: [Editorial](. SEBI should be specific about addressing small-cap risks]( Anand Vardarajan, Business Head at Tata Asset Management, said the tight liquidity situation has led to higher yields in the debt market, even as investors now seem more constructive about taking exposure in medium and longer-duration debt funds. This was visible in flows seen in short-term, corporate bond, and long-duration funds. You Might Also Like [Government prepares to auction telecom spectrum from May 20 worth ₹96,318 crore]( [Info-tech]( [Government prepares to auction telecom spectrum from May 20 worth ₹96,318 crore]( [Tata Motors’ Sanand plant in Gujarat to be upgraded for bigger passenger cars: MD]( [Companies]( [Tata Motors’ Sanand plant in Gujarat to be upgraded for bigger passenger cars: MD]( [PM Modi cuts LPG cylinder prices by ₹100 on International Women’s Day]( [National]( [PM Modi cuts LPG cylinder prices by ₹100 on International Women’s Day]( [ICAI to hold foundation and intermediate exams thrice a year]( [Education]( [ICAI to hold foundation and intermediate exams thrice a year]( Stay informed Subscribe to businessline to stay up-to-date with in-depth business news from India [arrow]( Copyright @ 2024, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](