Mid cap and small cap stocks started gaining from April. The Nifty Midcap 100 – TRI has surged by 21.75% since April. During the same period, Nifty Smallcap 100 – TRI has surged by 26.19%.
At present there are around 35 schemes in the flexi cap category. Out of 35 schemes, 19 schemes have increased their allocation in mid cap stocks and 26 schemes increased their allocation in small cap stocks. Around 24 flexi cap schemes have reduced their allocation in large cap stocks.
The analysis showed that fund managers are taking more exposure to mid and small cap to benefit from the current rally. Most of the flexi cap schemes have reduced their exposure in the large cap space since March. Most schemes increased their allocation in mid and small cap stocks just when these stocks started gaining momentum.
Source: ACE MF, Data as on June 2023 and March 2023, Data sorted on mid cap allocation in JuneWe did not consider 360 ONE Flexicap Fund for the analysis as the scheme was launched in June and did not have any past record for the comparison.
Flexi cap schemes offer the fund managers the freedom to invest across market capitalisations and sectors/themes. It means the fund managers can invest anywhere based on his outlook on the market. These schemes are typically recommended to moderate investors with an investment horizon of five to seven years.
Note, the above exercise is not a recommendation. This exercise is just to find out how the flexi cap schemes were allocating more to mid cap and small cap stocks to ride the upward momentum. One should not make investment or redemption decisions based on the above exercise. One should always make investment decisions based on the risk appetite, investment horizon and goal.
If you are looking for recommendations, see : Best flexi cap mutual funds to invest in 2023
