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Below the Quote on Mid & Small Cap by Mr. Dikshit Mittal, Senior Fund Manager - Equity at LIC Mutual Fund Asset Management

"Equity mutual funds witnessed a strong resurgence in June, with net inflows rising sharply to Rs23,568 crore from Rs18,994.56 crore in May, marking a robust 24% month-on-month increase. This momentum was largely driven by substantial inflows into the mid-cap and small-cap segments, reflecting growing investor confidence in India’s long-term growth prospects, even amidst global headwinds.

Investors are looking to get exposure to some of the faster-growing segments of the economy, reflected in their preference towards midcap and small-cap funds. 

The broad-based rally in indices like the Nifty 50, accompanied by stronger gains in mid- and small-cap indices, has rekindled investor enthusiasm. It seems many were awaiting a decisive market cue to reallocate towards equities a cue that emerged in June, prompting renewed participation.

After a dip in May, equity mutual fund inflows rebounded in June. Of the 11 equity MF sub-categories, all except ELSS recorded inflows. Flexi cap funds emerged as the top choice, attracting Rs 5,733 crore up 49% from Rs 3,841 crore in May.

Meanwhile, investor preference for hybrid categories such as arbitrage funds, multi-asset allocation funds, and dynamic asset/balanced advantage funds indicates a strategic and balanced approach to portfolio construction. The rise in SIP contributions and consistent net equity inflows continue to support the resilience of Indian equity markets in a volatile global environment."

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