Key Points
Small-cap funds have done fairly well in May, outperforming their large- and mid-cap peers despite the fact that the overall equity mutual fund space is not doing too well..
Alekh Yadav, Head of Investment Products & Solutions at Sanctum Wealth, said the current traction towards the small- cap funds have been on the back of attractive valuations in these stocks..
Hence, we dont suggest investors to become overweight, Yadav said.. Abhishek Banerjee, Founder & Chief Executive Officer at Lotusdew Wealth, said small-cap stocks traditionally exhibit stronger performance over a full market cycle, and it appears that asset allocators are adjusting portfolios by reducing exposure to large-cap stocks and increasing investments in smaller companies...
As an asset class, equity mutual funds have witnessed significant redemptions in April and May as investors have booked profits to capitalise on the uptrends after the underperformance of stock markets in the March quarter...
On significant redemptions in large-cap funds, Banerjee said large-cap stocks have consistently outperformed smaller company indices over the past 18-20 months and hence there is a shift being seen in this space..
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