Despite Volatility, Mid, Smallcap Funds Attract ₹53K Cr in H2FY25

Strong and Resilient Inflows have gained pace

- ABHISHEK KUMAR

Midcap and smallcap funds have demonstrated remarkable resilience, continuing to attract robust inflows despite recent market volatility. These funds garnered more than ₹53,000 crore in the second half of 2024-25 (H2FY25), even as the broader market faced a steep correction. This sustained interest, experts said, had provided crucial support to the mid and smallcap segments—a trend unlikely to reverse unless long-term returns disappoint.

"Despite the correction we saw till the end of February, SIP (systematic investment plan) inflows into small-cap and midcap funds did not moderate meaningfully in February and March. This is contrary to expectations. The continued MF (mutual fund) inflows and slowdown in foreign institutional investor outflows probably contributed to the relief rally we saw last month," said Krishnan V R, chief of the quantitative research team at Marcellus.