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A lot of money is coming back into the midcap and smallcap space, says Radhika Gupta of Edelweiss Asset Management

Updated : June 10, 2019 04:12 PM IST

The total inflow into equity schemes has grown close to Rs 5,000 crores in May, according to the Association of Mutual Funds in India's (AMFI) May data.

Radhika Gupta, CEO of Edelweiss Asset Management shared her views and outlook on the report.

“It is okay set of numbers. If you look at the fixed income and liquid numbers there in-line, I think equity numbers have come in at about Rs 5,000 crore, you have seen some redemption in balanced funds about Rs 2,000-3,000 crore. Our net equity number is looking at Rs 2,000 crore. It is not very different from April and it is not surprising given half of May went into the uncertainty around election, it is not a very bad number. What is heartening is a lot of money is coming back into the midcap and small cap space. So if you look at the equity breakup and AMFI’s detailed data, I think the number coming into the midcap and smallcap space is definitely encouraging,” she said.

“At least after May 23, the uncertainty around the election event is over. You will also see some pick up in markets. So one of the facts is that the one-year numbers are beginning to look better is a sign of improvement for most investors. So if you look at one-year returns on equity, they may be 5-10 percent, they were in the negatives a few months ago. So just that I think is a very positive impetus plus some of the positivity around new government,” she added.

“Midcap and smallcap — it has been very volatile period with what is happening in the credit markets over the last two weeks, midcap and smallcaps continue to be volatile but our belief is that if you look at where the value is today and the largecaps have run up substantially, the Nifty is at all-time highs, the multiples are expensive, so definitely there is value to be found in midcap and smallcap. People are raising midcap funds and smallcap funds. So if there is investor value to be found, it is probably in that segment,” said Gupta.

On systematic investment plans (SIPs), she added: “We haven’t got the numbers but I cannot imagine they would change very much. Anecdotally, on the ground we will see a little bit of pressure but I suspect the book will continue to be at Rs 8,000 crore. I wouldn’t be surprised if it is in the same Rs 8,000 crore vicinity.”
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