Equity indices in India have been reaching new all-time highs regularly over the past few weeks.

India mutual fund industry has been rocked once again by allegations of front-running, this time involving the high-flying Quant Mutual Fund.

Gone are the days when retail investors were stereotyped as reactive players entering at the peak of the market and fleeing at the first sign of trouble.

Navigating the Roller-Coaster of Small-Cap Funds

In the last few years, we saw equity mutual funds generating phenomenal returns.

In recent months, the stock market has witnessed several companies, spanning both small and large-cap sectors, undergoing regulatory scrutiny.

The Indian mutual fund industry is captivating retail investors like never before. In the last fiscal year alone, there has been an extraordinary surge in Assets Under Management (AUM), witnessing an impressive increase of Rs 14 lakh crore, pushing the total AUM to a record-breaking Rs 53.40 lakh crore at the end of March 2024.

The recent fluctuations in the market, spurred in part by SEBI's remarks on the broader market's exuberance and subsequent stress test of mid-cap and small-cap funds,

The upcoming mutual fund inflow numbers for March 2024, expected in the second week of April, might show an interesting picture. This is because a few weeks ago, Madhabi Puri Buch, the chairperson of Sebi, expressed concerns about the high valuations of small and mid-cap stocks that many retail investors like.

In the past week, mid-cap and small-cap dedicated funds have experienced underperformance compared to large-cap funds, marking a notable shift after a prolonged period. In the last one-year, broader indices-based funds have hugely outperformed large-cap funds.

As we celebrate our 38th anniversary, we not only reflect on our journey but also marvel at the remarkable evolution of the Indian mutual fund industry that has unfolded alongside us.

In the 1980s, the introduction of the 401(k) plan in the US marked a significant milestone for the equity market, propelling it to new heights throughout the decade and into the 1990s.