Fund Houses Not Affected Due To The Investments In Rid-, Small-Cap

Mutual fund schemes investing in small- and mid-cap companies have been fairly less affected in a market where most mutual fund schemes have given negative return, since the market went into a bearish mode following the subprime confusion in the US.

The Bombay Stock Exchange's Sensex dwindled almost 10.9 per cent by Friday from a record high of 15,868.85 points on July 24. In the same period, the BSE mid cap index fell 9.4 per cent and the BSE small cap index slid 7.9 per cent. Mutual fund schemes that typically invest more than 60 per cent of their portfolio in small- and mid-cap companies have been less affected by the downturn as compared to other schemes. Most mutual fund schemes have given negative returns of up to 12 per cent but these schemes have given maximum return in the market downturn. UTI MNC has benefitted during the downturn since it has exposure to low beta stocks. Domestic funds raised more than Rs 160 billion this year through 26 new equity schemes, according to Association of Mutual Funds in India. Bulk of this money was to be invested in mid-cap and small cap stocks.Fund schemes like HDFC Midcap Opportunities Fund, DSPML Micro Cap and others specifically targeting the midcap and small cap (and even the micro cap companies) were launched in the first six months of the year.