Small-Cap Mutual Funds See Rs. 34,000 Crore Inflows in 2024

Small-cap fund, which is a type of mutual fund that invests in small-size companies which are ranked 251st and below in terms of market capitalization. Small-cap mutual funds obtained an inflow of Rs. 34,223 crore in 2024 and show an inflow of Rs. 41,035 crore in the year 2023. Small-cap mutual funds accounted for 9% of the total Rs 3.94 lakh crore inflows in equity mutual funds in 2024.

Small-cap funds received their highest investment in December 2024, with Rs. 4,667 crore. This is a 14% increase from November, when the inflow was Rs. 4,111 crore. The asset under management (AUM) of small-cap funds reached Rs. 3.29 lakh crore On 31 December 2024. This marks a 33% increase from Rs. 2.47 lakh crore at the start of the year, in January 2024.

Small-cap funds gave an average return of 26.38% in 2024, while Motilal Oswal Small Cap Fund gave the highest return of about 45.47% in the same period. The lowest return was given by ICICI Prudential Small Cap Fund, which was about 15.03% in 2024.

Approx. 61.38 lakh new folios were added to small-cap funds in 2024. The total investment in these funds grew from Rs 1.78 lakh crore in January to Rs 2.40 lakh crore by December. By the end of 2024, there were approximately 29 small-cap schemes available.

Small cap funds increased more attention because of their high valuations and the excitement because of the constant inflows in the sector, in 2024. When the market regulator noticed that prices in the mid and small-cap segments were increasing fastly, mutual fund companies were asked to create a policy that included steps to protect investors.

As per SEBI mutual fund houses, mutual fund companies have started sharing the results of stress tests for their funds. These tests will show how long it would take to sell off 50% and 25% of the fund’s investments.