The mutual fund stress-test results are being watched closely as small-cap funds saw outflows for the first time in 30 months in March, after the capital markets regulator highlighted its concerns over “froth” in the smaller-cap segments.
Mutual funds’ search for higher returns has taken them deep into the micro-cap zone, backed by a rise in the inflows and prices of these stocks. But a micro-cap-focused fund should ideally not be your first investment. A measured and careful exposure is fine, though.
The IT sector funds have returned a paltry 5.06% in the last year. But that hasn’t stopped fund houses from being bullish on tech-sector funds. Most of such schemes invest primarily in IT companies listed in India. Should you invest when the sector has fallen so much?
From relying just on the Nifty 50’s PE ratio, the fund will now look at multiple factors. The last date for investors to exit if they do not approve of this change, is August 11.