Mid-cap mutual fund schemes have been outperforming small-cap funds in the last year, with an average return of 29% compared to 25% for small-cap funds. This trend has been driven by strong inflows into mid-cap funds, as well as the overall bullish equity market.
Investors have been drawn to mid-cap funds due to their better performance and potential for growth, as well as the increasing popularity of thematic funds like pharma funds, which have seen a return of 40%. Inflows into equity and hybrid funds have more than doubled in the past year, reaching ₹5.02 lakh crore, with SIP inflows accounting for a significant portion of this total.
The mutual fund industry has attracted a record number of new investors, with 9.8 million additions in the last year. This influx of new investors has also been supported by the launch of 153 new equity schemes in 2024. However, concerns over froth and overvaluation in the small-cap category have led to a shift in focus towards other types of funds.
Going forward, industry experts recommend focusing on large-cap equities for their attractive valuations, as well as cyclical sectors that are poised to benefit from the ongoing economic recovery. Overall, the mutual fund industry is expected to continue attracting new investors and offering opportunities for growth in the coming year.
