Since the fourth quarter of 2019-20, the AUM for the category has seen a phenomenal rise, due to favourable market movement, along with record net inflows.
Small-cap funds attracted Rs 37,178 in this year (till November). This includes Rs 3,699 crore last month and a record fund infusion of Rs 4,495 crore in October.
On the other hand, the large-cap category saw a pull out of Rs 2,688 crore in the first 11 months of this year.
"A few fund houses have limited the inflows in their small-cap funds over the last quarter given the sharp rise in flows and concerns on valuations,"
Going by the AMFI data, the asset base of the small-cap mutual fund hit its peak of Rs 2.2 lakh crore at the end of November.
Additionally, investor accounts in the category, too, climbed a staggering 62 lakh folios to 1.6 crore in November from 97.52 lakh a year-earlier. This shows that investors have become more inclined toward small-cap funds.
Under Sebi's rule, in small-cap mutual funds, fund managers are required to invest at least 65 per cent of their portfolios in small-cap stocks.
Overall, the AUM of the 42-player mutual fund industry reached Rs 49.04 lakh crore in November-end from Rs 40.37 lakh crore in November 2022, suggesting a gain of 22 per cent.