As small cap funds tend to grow faster during a bull run, it is important to check the portfolio for risky stocks and consider reallocating towards large caps or debt funds.
The mutual fund schemes saw an inflow to the tune of ₹22,837 crore, next to only small-cap mutual funds and around 18 percent of the total equity inflows.
The Union Budget 2023 removed the tax advantage for debt mutual funds, taxing all capital gains at the investors slab rate. However, investors can still benefit from the old tax rules by keeping their old investments untouched and putting fresh money into new debt funds. Additionally, allowing grandfathered investments to compound over longer years can increase the benefit of indexation. The old tax rules also apply to gold funds, international funds, and multi-asset funds with heavy debt allocation. This strategy can help investors build a tax-efficient corpus over time.