Small-cap, arbitrage funds buck 'low inflow' trend this calendar

Small-cap funds benefit from better valuations and performance track record, say analysts

Two equity funds at the opposite ends of the risk matrix — small-cap and arbitrage — bucked the ‘low inflow’ trend in May this calendar year 2023 (CY23) to receive the highest net inflows in recent years.

The Rs 3,280-crore net inflows into small-cap schemes in May was the highest for the category since the mutual fund (MF) industry started releasing fund-wise inflow data in April 2019.

Arbitrage schemes raked in a net Rs 6,640 crore — the highest since July 2021.

The inflows into small-cap schemes have been on a steady rise the past six months mostly due to