Mutual Fund corner: Experts discuss why investors are ditching large cap funds

Flows into large cap funds are tapering off. In this episode of ‘Mutual Fund Corner’, CNBC-TV18’s Sumaira Abidi spoke to Shreyash Devalkar, Sr Fund Manager-Equities of Axis AMC and Ashwin Patni, Head-Products & Alternatives of Axis AMC to discuss the falling flows in large cap funds.

Devalkar said, “Large cap category is actually the largest category of the actively managed mutual fund industry. Because it is the largest category, obviously, when there was a shift in the market, pre-pandemic, the last category was doing extremely well. Since last one and a half year, what we have noticed is the midcap and small cap as the category have done extremely well and the market breadth has widened. So, this is one of the reason why the investors might be choosing a small or mid-cap category over large cap.”

On large cap exposure, Devalkar said, “Large cap category location should be good for any investor or could be one of the largest in an equity portfolio. There investors can decide whether it is an actively managed large cap or a passively managed one. But the exposure to the large cap portfolio has to be there in whatever form.”