The returns from small- and mid-cap schemes of mutual funds (MFs) have outperformed the Bombay Stock Exchange (BSE) small- and mid-cap indices during the last three months.
While the small-cap index has risen by around 13.48% and the mid-cap index by 10.97% during the last three months, small- and mid-cap schemes have given returns as high as 23.71%.
Prateek Agrawal, VP and head-equities, ABN Amro, said, ?Fund managers of mid- and small-cap schemes take a bottom-up stock picking approach. Fund managers have been consistently increasing their exposure in stocks belonging to the small- and mid-cap category as the 30-share Sensex space was getting overheated. As a result, when the Sensex dipped rapidly, the fall in these sectors was relatively lower. The result of this is the superior returns from these schemes.?
The JM Emerging Leaders scheme with an asset under management (AUM) of Rs 172.74 crore has given a return of 23.71% in the last three months. This scheme has 55.36% exposure in the small-cap stocks and 40.44% exposure in the mid-cap stocks.
Similarly, Birla Mid-cap Scheme with an AUM of Rs 367.35 crore, which has 59.10% exposure in stocks of mid-cap companies and 20.57% exposure in small-cap companies, has generated a return of 18.02% during the last three months. There is, however, a word of caution from one fund manager who says that a mid-cap portfolio could face liquidity crunch.