Mid-, small-cap schemes continue to gain traction

INVESTORS CONTINUE TO prefer small- and mid-cap schemes over large-caps despite concerns over high valuations.

- ANANYA GROVER

In the first six months of 2025, these schemes recorded a combined inflow of ₹46,645 crore – more than three times that of large-caps' ₹14,025 crore. Small-cap schemes saw inflows of ₹24,774 while mid-cap schemes garnered ₹21,871 crore.

This trend is quite similar to the previous year when inflows into small- and mid-caps were higher by 76% than large-caps at ₹34,223 crore and ₹34,303 crore, respectively. Large caps attracted ₹19,415 crore.

What is interesting is that returns from small- and mid-cap indices were flat in 2024. While the BSE Large Cap's one-year return is 0.88%, the mid-and small-cap indices returned (-0.22%) and (-0.17%).

What seems to be attracting investors is the significant out-performance over a three-year period – the BSE large-cap returned 48.93% while the mid-cap and small-cap indices returned 97.57% and 106.12%, respectively.