Latest news with #HarshvardhanRoongta
Time of India
6 days ago
- Business
- Time of India
Retail fund flows surge: Mid, smallcap schemes draw Rs 20,255cr in Q1; investors chase high returns despite expensive valuations
Retail investors are continuing to pour large sums into mid and smallcap mutual fund schemes, chasing high returns even as experts warn of stretched valuations and recommend a shift to safer ground. Tired of too many ads? go ad free now According to data from the Association of Mutual Funds in India (AMFI), investors allocated Rs 20,255 crore into mid and smallcap schemes in the first quarter of FY26—accounting for 30% of total equity inflows of Rs 66,689 crore during the period. Over the past 12 months, retail investments into these funds stood at Rs 90,075 crore, making up 23% of total equity flows of Rs 3.9 lakh crore, ET reported. 'A lot of retail investors continue to chase past performance,' said Harshvardhan Roongta, principal financial planner at Roongta Securities. 'Returns from mid and smallcap funds for three and five-year periods have been very high compared to large caps, which has kept investor interest intact.' According to Value Research data, midcap mutual funds have delivered 21.3% average returns over the past three years and 27.4% over five years. Smallcap funds did even better, with 21.94% returns over three years and 31.28% over five. In comparison, Nifty 50 returned 13.55% and 18.58% over the same periods. 'Investors are looking to get exposure to some of the faster-growing segments of the economy, reflected in their preference towards midcap and smallcap funds,' said Dikshit Mittal, senior fund manager – equity, LIC Mutual Fund. ICICI Prudential Mutual Fund noted in its July outlook that both midcap and smallcap indices continue to trade at valuation multiples far higher than historical averages. While valuations have eased slightly since their September 2024 peaks, they remain elevated. Tired of too many ads? go ad free now The price-to-earnings (PE) ratio for the Nifty Smallcap 250 stands at 32 and Nifty Midcap 150 at 33.4—significantly higher than Nifty 50's 21.7, ET report said. A Whiteoak Capital study showed that while large caps currently trade at a 10% discount to their five-year average, midcaps are at a 14% premium and smallcaps at a 28% premium to long-term averages. Given this, wealth managers are urging caution. 'Aggressive investors should allocate only 10–15% of their equity portfolio to the mid and small cap space,' said Vishal Dhawan, founder, Plan Ahead Wealth Advisors. Dhawan advised investors to stagger their investments through SIPs and maintain a long-term horizon of at least 10 years to avoid potential disappointment. (Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India) Stay informed with the latest business news, updates on bank holidays and public holidays.
Time of India
7 days ago
- Business
- Time of India
Retail investors flock to mid and smallcap mutual funds despite valuation concerns
Mumbai: Retail investors have continued to plough high sums into mid and smallcap mutual fund schemes as they chase high returns , despite elevated valuations and advisories on moving to safer ground. Retail investors have invested ₹20,255 crore into these mutual funds in the first three months of this financial year, accounting for 30% of total equity inflows of ₹66,689 crore. Association of Mutual Funds of India data also show that, over the past year, investors have poured ₹90,075 crore into these funds, accounting for 23% of total equity flows of ₹3.9 lakh crore. "A lot of retail investors continue to chase past performance," said Harshvardhan Roongta, principal financial planner, Roongta Securities. "Returns from mid and smallcap funds for three and five-year periods have been very high compared to large caps, which has kept investor interest intact." Midcap funds returned an average 21.3% over the past three years and 27.4% over five years, according to Value Research data. Smallcap funds returned 21.94% in three years and 31.28% in five. The Nifty 50 returned 13.55 in three years and 18.58% in five. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Agencies "Investors are looking to get exposure to some of the faster-growing segments of the economy, reflected in their preference towards midcap and smallcap funds," said Dikshit Mittal, senior fund manager, equity, LIC Mutual Fund. ICICI Prudential Mutual Fund said in its monthly outlook report for July that both mid and smallcap indices continue to trade at significantly higher valuation multiples compared with historical averages, even though they have cooled off from their September 2024 highs. In terms of price to earnings (PE) ratio, the Nifty Smallcap 250 is at 32 and the Nifty Midcap 150 at 33.4, while the Nifty 50 trades at a PE of 21.7. According to a study by Whiteoak Capital, while large caps are quoting at a 10% discount to their five-year average, midcaps are at a 14% premium and smallcaps are at a 28% premium to their long-term averages. Given the premium valuations of mid and smallcap funds, wealth managers have been asking investors to take a long-term view while allocating money and not expect high returns going ahead. "Aggressive investors should allocate only 10-15% of their equity portfolio to the mid and small cap space," said Vishal Dhawan, founder, Plan Ahead Wealth Advisors. Dhawan urged investors to stagger investments using SIPs and have at least a 10-year view, else they are likely to be disappointed.
Economic Times
7 days ago
- Business
- Economic Times
Retail investors flock to mid and smallcap mutual funds despite valuation concerns
Synopsis Indian retail investors are actively investing in mid and smallcap mutual funds. They are attracted by the high returns these funds have provided. Over the past year, significant investments have flowed into these funds. Experts advise caution due to high valuations. They suggest a long-term investment approach. Financial advisors recommend limiting exposure to these funds within the overall portfolio. Given the premium valuations of mid and smallcap funds, wealth managers have been asking investors to take a long-term view while allocating money and not expect high returns going ahead. Mumbai: Retail investors have continued to plough high sums into mid and smallcap mutual fund schemes as they chase high returns, despite elevated valuations and advisories on moving to safer ground. Retail investors have invested ₹20,255 crore into these mutual funds in the first three months of this financial year, accounting for 30% of total equity inflows of ₹66,689 crore. Association of Mutual Funds of India data also show that, over the past year, investors have poured ₹90,075 crore into these funds, accounting for 23% of total equity flows of ₹3.9 lakh crore."A lot of retail investors continue to chase past performance," said Harshvardhan Roongta, principal financial planner, Roongta Securities. "Returns from mid and smallcap funds for three and five-year periods have been very high compared to large caps, which has kept investor interest intact."Midcap funds returned an average 21.3% over the past three years and 27.4% over five years, according to Value Research data. Smallcap funds returned 21.94% in three years and 31.28% in five. The Nifty 50 returned 13.55 in three years and 18.58% in five."Investors are looking to get exposure to some of the faster-growing segments of the economy, reflected in their preference towards midcap and smallcap funds," said Dikshit Mittal, senior fund manager, equity, LIC Mutual Prudential Mutual Fund said in its monthly outlook report for July that both mid and smallcap indices continue to trade at significantly higher valuation multiples compared with historical averages, even though they have cooled off from their September 2024 highs. In terms of price to earnings (PE) ratio, the Nifty Smallcap 250 is at 32 and the Nifty Midcap 150 at 33.4, while the Nifty 50 trades at a PE of 21.7. According to a study by Whiteoak Capital, while large caps are quoting at a 10% discount to their five-year average, midcaps are at a 14% premium and smallcaps are at a 28% premium to their long-term the premium valuations of mid and smallcap funds, wealth managers have been asking investors to take a long-term view while allocating money and not expect high returns going ahead."Aggressive investors should allocate only 10-15% of their equity portfolio to the mid and small cap space," said Vishal Dhawan, founder, Plan Ahead Wealth Advisors. Dhawan urged investors to stagger investments using SIPs and have at least a 10-year view, else they are likely to be disappointed.
Economic Times
23-05-2025
- Business
- Economic Times
Are RBI floating rate bonds the best option as FD rates plummet?
Investors are showing increased interest in the Reserve Bank of India's floating rate savings bonds. These bonds offer annual yields up to 8.05% for a seven-year term. Fixed deposit rates are declining, making these bonds attractive. The bonds provide a 35-basis-point markup over the National Savings Certificate. While safe, they lack liquidity and cannot be prematurely withdrawn. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Risk-averse savers are increasingly turning to the Reserve Bank of India 's (RBI) floating rate savings bonds , which promise annual yields of up to 8.05% for a 7-year tenure, as fixed deposit rates head south quickly amid modest credit growth, ample liquidity, and expectations of further policy rate reductions."Corporate and bank deposit rates have come down in line after the rate cuts announced by RBI," said Anup Bhaiya, MD and CEO, Money Honey Financial - a Mumbai-based distributor. "However, since the RBI floating rate deposit rates continue to be unchanged at 8.05%, there is higher demand for these deposits from retail investors."These bonds, issued by the central bank on behalf of the government, come with high safety and pay a 35-basis-point mark-up over the returns promised by the National Savings works out currently to 8.05% and has a tenure of seven years, with interest paid once every six months. This interest rate could also change once every six months, and the interest income is taxable for the be sure, these bonds, although sovereign backed, do not have a liquid market, and investors need to hold them until maturity."There is no premature withdrawal option, and these bonds cannot be used as a collateral for borrowing, and hence, investors must be sure to buy and hold them until maturity," said Harshvardhan Roongta, CEO, Roongta minimum investment is ₹1,000 and there is no upper limit on investments in these said both deposit-taking non-bank lenders and banks have slashed rates by 25 to 100 basis points after RBI reduced the policy rate by a cumulative 50 basis points since 10-year benchmark yields investors 6.22%.After the rate cuts, Bajaj Finance that has a AAA rating pays 7.25% for a 24-60 month deposit, while SBI pays 6.3% for a deposit between 5 and 10 years. Senior citizens could earn 50-100 basis points can log on to the RBI retail direct website to buy these bonds, or can buy them from a distributor or private bank websites easily. "These bonds help you earn a lucrative 180 basis points over the 10-year benchmark government bond, while over fixed deposits and corporate deposits these bonds help you earn around 65-150 basis points more," said Vikram Dalal, managing director, Synergy Capital.
