Better risk-reward, FPI flows augur well for LargeCap MFs in 2024: Analysts

Valuation is comfortable for large-caps, but there is little margin of safety in the broader market categories, analysts said

Amid stretched valuations and lack of positive triggers, analysts suggest investors lower their return expectations from mid-, and small-cap equity mutual funds in calendar year 2024.

They rather suggest investors rotate funds to large-cap equity mutual funds this year for relatively better returns.

"The valuation of mid-, and small-cap cohorts isn't very comfortable. Most of the positives are priced-in, and a large number of stocks are trading above their intrinsic value. By comparison, few large-cap stocks are trading at reasonable valuations. So, from a risk-return perspective, large-cap funds may generate lower-than-historical average returns in 2024, whereas mid-, and small-cap funds