SEBI’s focus on small-cap valuations results in the first net redemption in small-cap schemes since August 2021. Stress tests prompt mutual fund companies to disclose liquidity metrics. Large-cap schemes see a surge in inflows, with nearly 70% shifting from small-caps. ETFs gain popularity, hitting a new high in March 2024. Performance declines in small-cap schemes, signaling a loss of investor appetite. Large-cap folios rise sharply, while mid-cap folios decline moderately. Despite the sell-off, small-cap fund managers deploy cash reserves, increasing holdings in large-cap stocks as a risk hedge.
Investor Sentiment Shifts: SEBI’s Measures Impact Small-Cap Funds
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