Due to excellent performance, small and midcap funds are the first choice of MF investors

Although net inflows into smallcap funds turned negative for the first time in the last 30 months in March, they have been a big attraction for new investors. If we look at the smallcap category, 3,60,000 new accounts have been added in the last month alone. Which is the second highest growth among all active equity categories. According to experts, smallcap funds have continued to attract investors due to their strong performance throughout the time period. Smallcap and midcap schemes have maintained their dominance in the top performing list. Their performance has been excellent, especially over the five-year and ten-year time frames.

The size of the sectoral and thematic fund category is six times larger than that of smallcap funds. But in comparison, only 8,17,000 new accounts were added in this category in the month of March. Which points to a lower number of new account openings compared to its smallcap size. Midcap funds are also ahead of low-risk largecap and flexicap funds in terms of new account additions. According to data from the Association of Mutual Funds in India (AMFI), about 3,00,000 new accounts were opened in midcap schemes in March. In contrast, largecap and flexicap funds added 1,79,000 and 2,56,600 new accounts respectively.