The rally in India’s mid- and small-cap stocks will continue with more inflows into these segments, the head of India’s 10th largest mutual fund said on Tuesday.
“The rally may continue due to more flows and fewer companies to invest in,” Kalpen Parekh, director and CEO of Mumbai-based mutual fund DSP, told the Reuters Trading India forum.
Mid- and small-cap indices have significantly outperformed their larger peers in 2023 Useful small-cap 100 index is up almost 33% this year, while the Nifty midcap 50 index is up around 29%, against an 8.7% rise in the benchmark Nifty 50.
DSP investment fund will also launch a small-cap fund this year to capitalize on inflows into the segment, Parekh said.
“We have approval to launch a small-cap index fund with high-quality companies,” he said, adding that the fund is likely to launch in December.
DSP manages assets worth more than $16 billion. In 2018, DSP Group purchased BlackRock’s 40% stake in DSP BlackRock Investment Managers and was renamed DSP Investment Managers.
BlackRock returned to India this year in partnership with Mukesh Ambani’s Jio Financial Services.
Parekh believes that Exchange Traded Funds (ETFs) will continue to grow in India due to factors such as the simplicity of passive investing, mainly driven by money from India’s provident funds.
“Individual investors are going the index fund route,” he added.
Indian asset managers are launching more passive funds in a crowded active fund market as they struggle to beat benchmark returns, forcing a shift in the $558 billion industry.
Parekh said DSP’s quantitative fund had underperformed after the pandemic as the market had rewarded a different group of companies, but expected the tide to turn quickly.
“We are adhering to the rules as defined, so when the phase turns, the fund should do well,” he said.
“The rally may continue due to more flows and fewer companies to invest in,” Kalpen Parekh, director and CEO of Mumbai-based mutual fund DSP, told the Reuters Trading India forum.
Mid- and small-cap indices have significantly outperformed their larger peers in 2023 Useful small-cap 100 index is up almost 33% this year, while the Nifty midcap 50 index is up around 29%, against an 8.7% rise in the benchmark Nifty 50.
DSP investment fund will also launch a small-cap fund this year to capitalize on inflows into the segment, Parekh said.
“We have approval to launch a small-cap index fund with high-quality companies,” he said, adding that the fund is likely to launch in December.
DSP manages assets worth more than $16 billion. In 2018, DSP Group purchased BlackRock’s 40% stake in DSP BlackRock Investment Managers and was renamed DSP Investment Managers.
BlackRock returned to India this year in partnership with Mukesh Ambani’s Jio Financial Services.
Parekh believes that Exchange Traded Funds (ETFs) will continue to grow in India due to factors such as the simplicity of passive investing, mainly driven by money from India’s provident funds.
“Individual investors are going the index fund route,” he added.
Indian asset managers are launching more passive funds in a crowded active fund market as they struggle to beat benchmark returns, forcing a shift in the $558 billion industry.
Parekh said DSP’s quantitative fund had underperformed after the pandemic as the market had rewarded a different group of companies, but expected the tide to turn quickly.
“We are adhering to the rules as defined, so when the phase turns, the fund should do well,” he said.
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