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India Equity Mutual Fund Inflows to Small-Caps Drive Them to Near 2-Year High in February

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<p>Despite worries over value, small-cap stocks led the charge in February as inflows into India’s equity mutual funds reached their highest level in almost two years, according to figures released on Friday by an industry organization.</p>
<p><img decoding=”async” class=”alignnone wp-image-488850″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-india-equity-mutual-fund-inflows-to-small-caps-drive-them-to-near-2-year-high-in-f.jpg” alt=”theindiaprint.com india equity mutual fund inflows to small caps drive them to near 2 year high in f” width=”1044″ height=”783″ title=”India Equity Mutual Fund Inflows to Small-Caps Drive Them to Near 2-Year High in February 12″></p>
<p>According to statistics from the Association of Mutual Funds in India (AMFI), net equity mutual fund inflows increased 23.34% sequentially to 268.66 billion rupees ($3.25 billion), the highest level since March 2022.</p>
<p>For the last three years, net inflows into domestic stock mutual funds have totaled 4.82 trillion rupees, which is much more than the net inflows from overseas of 177.78 billion rupees.</p>
<p>With the help of inflows from mutual funds, the benchmark NSE Nifty 50 has increased by 54.68% during the last 36 months.</p>
<p>According to AMFI CEO Venkat Chalasani, “growing interest in sectoral and thematic funds due to the introduction of eight new funds aided equity inflows in February.”</p>
<p>In terms of market capitalization, small-cap funds made up the majority of investments made in equity-oriented schemes; however, their share of investments decreased to 29.22 billion rupees last month from 32.57 billion rupees in January.</p>
<p>Mid-cap inflows decreased by 12.28% over a consecutive period to 18.08 billion rupees.</p>
<p>For the second consecutive month, net inflows were seen in large-cap equities mutual funds.</p>
<p>In February, small- and mid-cap stocks had declines of 0.31% and 0.48%, respectively, while the Nifty 50 saw a rise of 1.18%. So far in March, they have continued to perform poorly.</p>
<p>Chalasani said, “We have looked for ways to improve investor disclosures and strengthen risk management.”</p>
<p>After the spike in the small- and mid-cap sectors last month, AMFI urged asset management firms to guarantee that the right procedures were in place to control risks and safeguard investors.</p>
<p>Chalasani said, “AMFI will release the initial set of disclosures on March 15.”</p>
<p>On February 29, Reuters revealed that money managers were requested by India’s market regulator to limit one-time contributions in small- and mid-cap funds.</p>
<p>In February, contributions to systematic investment plans (SIPs) reached a record-breaking 191.86 billion rupees.</p>


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