Key Points
In 2023 ending, we discussed the midcap and smallcap rally where we advised our viewers to rebalance their portfolio across largecaps, but the current numbers that have come in terms of SIP inflows and specifically in these two categories have achieved record high levels..
The ones who were already invested really tasted the returns for the first time and then they realised that in the longer term smallcap and midcaps generally tend to outperform largecaps and there could be a certain cyclicality involved at a heightened level but still midcaps and smallcaps are poised to outperform that...
If you were to juxtapose a few data points and see how the total mobilisation is looking at a gross and net level and you run a correlation with the number of folios increasing at a gross level, chunky and bulky redemptions are happening but at the same time, there are much more slightly smaller ticket size investments are entering through the SIP route...
In fact, there is good reason to believe that a significant amount of capital will be rotated out of small and midcaps back into largecaps or largecap oriented schemes, probably flexi caps and multi caps also going ahead because these funds also have a tendency to have a largecap bias at least as on date and that is how most of these flexible mandate funds are being managed..
Nirav Karkera: One thing that investors must understand is that if you're trying to play the broader rally in the segment; if you believe that midcaps as an entire basket or smallcaps as an entire basket is going to do well, you must go through the passive route because that gives you exposure to the basket in entirety..
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It is a good time to incrementally allocate more money towards largecaps from a near-term standpoint:Ankit
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