Small And Mid Cap Funds Remain Positive, Says Radhika Gupta

Radhika Gupta, Managing Director and CEO of Edelweiss Mutual Fund, has affirmed that small cap and mid cap funds continue to show positive performance for the month. This statement comes amidst concerns about redemption pressures and the overall market outlook.

Gupta addressed the question of increased redemption pressure. She noted that while January’s industry numbers from the Association of Mutual Funds in India (AMFI) were yet to be released, there has been no significant change in figures. “Our January equity numbers, including mid cap and small cap funds, have actually improved compared to November and December,” she said. “There is more fear mongering than reality.”

When asked about the concerns raised by industry experts regarding the long-term outlook for Systematic Investment Plans, Gupta provided a reassuring perspective. She highlighted that despite market corrections, long-term SIP investors in mid cap funds have seen minimum returns of 8% over a decade.

"...after the midcap index has corrected 50-60% and lots has happened, the minimum 10 year return a customer has earned is 10% in lump sum and 8% in SIP", Gupta said.

She further said that while these numbers may not look great, "compare post tax to any traditional investment instrument, they are not bad returns and the customer certainly has not lost money. If you do this analysis at an index level, not at a fund level, over 10 years on SIP, the minimum mid cap SIP return is 6%, small cap is flat."

She remains confident in the potential of these funds, stating, "If you do an sip and are a 10 year SIP customer, you are not likely to loose money."