Mutual funds load large-caps, reduce small-caps in first quarter

Expensive valuations and re-categorisation norms have led to churn in mutual fund (MF) holdings, with money flowing out of mid- and small-caps and moving into large-caps, an analysis of latest shareholding data shows.

In the June quarter, MFs’ ownership of large-caps rose 120 basis points (bps) from the levels they held in the September quarter, before the market regulator issued a circular on re-categorisation. 

Meanwhile, ownership levels in mid-caps inched up 90 bps, while that in small-caps reduced 10 bps. However, on an individual basis several companies in the small-cap universe saw MF holdings come down during the June quarter.