# The Small and midcaps put together has outperformed Nifty by over 80% since covid and around 45% since march 2023. This outperformance is expected to reverse similar to what has happened from 2018 to 2020 after over 80% outperformance between 2013 to 2018.
# Last time the outperformance was driven by individual stock buying while this time it is driven by Mutual fund buying. Largest midcap fund is around 75000 crores, largest smallcap fund in 65000 crores+.
# The outperformance is mainly due to valuation stretch which has primarily happened due to excessive inflows through sip and bulk routes.
# A mean reversion of this trend can very well playout in 2025 wherein people try to lockin gains in the mid and small cap funds which has generated very high returns in last 3 years and park their money in large caps.
# So the wise trade would be to sell midcap and small cap funds to half and switch to large cap funds as the later is expected to generate higher alpha considering the valuation.
# Last time the outperformance was driven by individual stock buying while this time it is driven by Mutual fund buying. Largest midcap fund is around 75000 crores, largest smallcap fund in 65000 crores+.
# The outperformance is mainly due to valuation stretch which has primarily happened due to excessive inflows through sip and bulk routes.
# A mean reversion of this trend can very well playout in 2025 wherein people try to lockin gains in the mid and small cap funds which has generated very high returns in last 3 years and park their money in large caps.
# So the wise trade would be to sell midcap and small cap funds to half and switch to large cap funds as the later is expected to generate higher alpha considering the valuation.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.