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MC30 top funds: The top 10 stocks in a mutual fund scheme, especially an equity scheme, holds significance as a higher weight in them dictate fund performance
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The liquidity disclosure requirement is unlikely to impact the portfolio construction of the midcap and smallcap funds. Provided, there's a chance that fund managers may increase their holdings in stocks with higher liquidity to be in a better position to compete within the category
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The second round results revealed that small-cap funds would need 13.7 days on an average, to liquidate 50 percent of their portfolios, almost similar to the category average of 14 days that was disclosed a month ago
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Analysts caution that this downturn may not have reached its bottom yet and advise investors to remain cautious as the margin of safety diminishes
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SEBI asks fund houses to ignore the least 20% illiquid stocks while assessing liquidity.
The idea is to let microcaps- the tiniest of the smallcaps- to grow unfettered as they could turn into tomorrow’s multibaggers. In the first such attempt, Moneycontrol identifies these 20% stocks.
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One should only invest in small-cap funds if the risks are properly understood and one has the patience to stay invested for at least 5-7 years. Regularly rebalancing their portfolios and reassessing exposure to riskier small-caps can help investors manage long term investment wisely.
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Sebi has been concerned about the potential impact of sudden redemptions in funds following a change in sentiment or any other factor that could make funds sell their more liquid holdings and saddle remaining unitholders with illiquid stocks.
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The schemes with larger asset size barring smallcap funds have followed buy and hold strategy and deployed the incremental corpus within their existing stocks holdings
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Instead of holding cash, fund managers find newer opportunities to deploy the fresh flows into the market
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Many microcap stocks held by mutual funds have not yet performed well. Fund managers continue holding these stocks in their portfolio believing that these businesses may play out well in the future
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Although smallcap mutual fund schemes must invest at least 65 percent of the corpus in smallcap stocks, they can invest the balance in large or midcap stocks. Large-cap investments help mitigate risk and provide cushion if markets were to fall sharply
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Nifty hitting the 20,000-point level is a significant milestone. But whether investors should change their mutual fund investment strategy depends on factors specific to their individual financial goals, risk tolerance, and existing investment portfolios.
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A Moneycontrol Personal Finance analysis of diversified equity schemes shows that small-cap funds typically have the least turnover ratios. To get the best out of small-cap stock picks, it is widely held that these stocks must be held through their life cycles
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According to the AMFI data for July, multi-cap funds witnessed net inflows worth Rs 2,500 crore, while flexi-cap funds saw outflows to the tune of Rs 932 crore.
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Despite huge inflows, smallcap fund managers say that valuations haven’t yet peaked. But many funds have chosen to shut their doors to hot money
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Due to a wide range of small-cap stocks in the market, fund houses go bottom-fishing to pick multibaggers of tomorrow. In this pursuit, many schemes end up having unique or exclusive stocks
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The quantum of funds collected by the fund house through the scheme is significant as it had average assets under management of Rs 815 crore for the June quarter. The AMC is the 37th biggest fund house in the 43-member Indian mutual fund industry
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Mutual funds schemes rejig their portfolios based on this classification aligning with the regulator’s mandate. Especially, midcap schemes are likely to add exposure in these stocks to maintain the stipulated limit
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Smallcap mutualfunds outperformed largecap and midcap funds with huge margin in the last 10 years. They have a potential to generate relatively higher return if they are held for long term. But they are more volatile than other equity funds
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Bhattacharya believes a balanced approach while picking large, mid- and small-cap funds is good right now, rather than being completely risk-averse
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Smallcap funds mostly prefer bottom-up approach while constructing their portfolio. However, the category consolidated data showcases the sectors that are having emerging companies with promising prospects.
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While some large-cap funds did well this year, many did not. But switching your funds now would be akin to driving looking at the rear-view mirror.
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Equity schemes with higher allocation to large and midcap stocks delivered better returns than those that also had sizeable exposure to smallcap stocks
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Most of the schemes in the list have been allocated majorly to mid and smallcap stocks
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