Large cap mutual funds raised Rs 1,287 crore in January on profit booking | Top Vip News

Investors flocked to large-cap oriented mutual funds with an inflow of Rs 1,287 crore in January, making it the biggest fund infusion in 19 months, as a significant rise in small caps and mid-caps propelled them to record gains. This is a big turnaround after a net outflow of Rs 281 crore in December. Also, the amount was 80 per cent higher than the inflows of Rs 716 crore in January last year.

The latest entry helped boost the asset base of the large-cap equity category by 26 per cent to Rs 3 lakh crore at the end of January from Rs 2.38 lakh crore a year ago. According to the latest data from the Association of Mutual Funds of India (Amfi), equity mutual funds focused on large-cap companies received inflows worth Rs 1,287 crore in January. This was the highest level since July 2022, when the category recorded an inflow of Rs 2,052 crore.

Given the significant rise in small and midcaps, investors are booking some gains and rebalancing towards largecaps, said Kaustubh Belapurkar, director – research manager at Morningstar Investment Research India. Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, said: “Large-cap companies demonstrated positive contributions in January, reversing the net outflows experienced in December 2023. This change in trend is in line with the valuation differentials among large companies. and the medium and small ones. tops, suggesting that schemes aimed at big caps or flexi caps may attract greater flows in the future.

Ahead of the December 2023 release, the category attracted Rs 307 crore in November and Rs 724 crore in October. Overall, equity schemes recorded an inflow of Rs 21,780 crore in January this year, making it the highest monthly infusion in nearly two years. The latest inflow was about 28 per cent higher than the inflows of Rs 16,997 crore in December.

Additionally, mid-cap oriented funds and small cap oriented funds continued to attract investors with inflows of Rs 2,061 crore and Rs 3,257 crore, respectively. Feroze Azeez, deputy chief executive officer of Anand Rathi Wealth Ltd, said that in fiscal 2024, up to December, the total outflow was around Rs 4,949 crore from large-cap companies. During the same period, small caps received inflows of Rs 34,103 crore.

For fiscal 2024, large caps generated an absolute return of 28 percent, while small caps generated more than 60 percent. Since this would have created skewed portfolio allocations towards mid- and small-caps, as well as a huge increase in small-caps compared to large-caps, a shift in allocations towards large-caps is warranted, he added. “With mid-caps commanding premiums of 15 per cent and small-caps commanding premiums of over 20 per cent, investors are realizing the considerable valuation gap with the large-cap segment and, consequently, are making adjustments to their investments,” Gopal Kavalireddi, vice president of research. at FYERS, he said.

The growing interest in large-cap funds could be seen in the growing number of investor portfolios, both month-on-month and annually. Year-on-year, the number of folios increased by over four lakh to 1.33 crore in January, while month-on-month, there was an increase of 1.45 lakh folios.