Smallcap and midcap mutual funds attracted strong investor interest in September, together accounting for 44% of total equity inflows. Smallcap schemes received ₹9,038 crore while midcap funds added ₹7,834 crore. Both categories continued to dominate despite concerns about liquidity risks.
Overall equity inflows rose sharply to ₹38,307 crore, marking a 31% jump from August. Flexicap funds also performed well with ₹6,702 crore, while largecap funds returned to positive territory after two months of outflows, recording ₹859 crore.
Systematic investment plans remained steady, contributing a record ₹32,490 crore. This shows retail investors are continuing to invest regularly despite market volatility.
Market indices reflected mixed trends. The Nifty 50 declined nearly 12% over the year, the Nifty Midcap 150 stayed flat, while the Nifty Smallcap 250 gained about 3% and remained close to all‑time highs.
Experts highlighted both opportunities and risks. Seemant Shukla of Quantum Mutual Fund noted that smallcap inflows are rising but liquidity remains a challenge. Viraj Gandhi of SAMCO Mutual Fund said small and midcap indices are outperforming largecaps, boosting investor confidence. Morningstar India observed that investors are using corrections to average costs, showing faith in long‑term growth.
The surge in inflows underlines strong appetite for growth‑oriented funds, though analysts caution that heavy concentration in smallcap schemes could pose risks if redemptions increase.