Biggest Wealth Creators! Small-cap and mid-cap funds among top performers in last one year; check list here

Biggest wealth creator fund schemes: Small-cap and mid-cap mutual fund schemes emerged as top performers in actively-managed equity funds over the past year. While some struggled to beat benchmarks, these schemes maintained their lead in returns over a five-year period.
According to an ET report, value-oriented funds also fared well, with managers focusing on public sector companies in sectors like banks, railways, and defence.On the other hand, large-cap funds, investing predominantly in the top 100 stocks, lagged behind due to heavy exposure to private banks and IT firms, which underperformed the market.

Interestingly, last month Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch expressed concerns about the inflated valuations of small and mid-cap stocks, popular among retail investors. Buch warned against allowing market froth to escalate, indicating the potential risks of a market bubble.
“There are pockets of froth in the market. Some people call it a bubble, some may call it froth,” Buch said. “It may not be appropriate to allow that froth to keep building. A bubble will burst because, by definition, bubbles burst. So, when they burst, they impact the investors adversely and that’s not a good thing,” she had said.
Assets under management for small-cap and mid-cap schemes hit record highs of Rs 2.49 lakh crore and Rs 2.94 lakh crore, respectively, by February 2024.
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However, despite worries about high valuations, small-cap stocks rallied strongly, outperforming benchmarks significantly last week.
Around 400 small-cap stocks delivered double-digit returns, with 65 surpassing 20% in the week ending April 5, according to Ace Equity data. Notable gainers included Geojit Financial Services, PNB Housing Finance, Cochin Shipyard, Hindustan Construction Co, and more.
Additionally, 22 stocks hit 52-week highs during the same period. While small-cap stocks show resilience, fund managers are cautious about returns in the upcoming fiscal year, expecting a moderation compared to the previous year.