- Moneycontrol
Is there a bubble in smallcap stocks? Not yet, say fund managers
Smallcap mutual funds have been among the most popular mutual fund (MF) schemes of late. In the last three years, these schemes got net inflows (more money came in than went out) of Rs 39,400 crore, while largecap flows have been at a trickle, at Rs 4,700 crore. In fact, midcap funds have also seen net buying worth Rs 36,700 crore. The inflows have picked up over the last 12 months, with smallcap funds receiving nearly Rs 30,000 crore since June 2022. This has raised concerns of a bubble in the smallcap space.
Limiting inflows
Smallcap is one category where liquidity is poor and impact costs are high compared to largecaps and midcaps. Therefore, the extra gush of inflows has forced some mutual funds (MF) to curtail fresh investment into these schemes.