What is Core & Satellite strategy?

Small cap mutual funds and sectoral or thematic funds seem to be favourites of retail investors. These two particular categories of mutual funds have received maximum inflows in last one year or so. According to Association of Mutual Funds in India (Amfi) data, in January 2024, retail investors investment maximum funds in thematic funds followed by small cap funds.

Even flexi caps are also favourite of small investors. As of January 2024, flexi cap mutual funds had the biggest chunk of Assets Under Management (AUM) when compared to other categories of equity funds. Flexi cap funds had net AUM of Rs 3.34 lakh crore as of January end.

The net inflows in small cap funds has jumped 44 per cent year on year (YoY) to Rs 3,256.98 crore in January 2024 from Rs 2,255.85 crore in January 2023.

Net asset under management (AUM) of small cap funds has ballooned 90 per cent YoY to Rs 2.47 lakh crore in January 2024 from Rs 1.30 lakh crore in year ago month.

While, net inflows of thematic funds has jumped five times to Rs 4,804.69 crore in January 2024 from Rs 903.19 crore in January 2023.

And, AUM of such funds has jumped 62 per cent YoY to Rs 2.71 lakh crore in this calendar year’s first month from Rs 1.67 lakh crore in January 2023.

After Covid-19 pandemic saga, retail investors which came into the market, they have been so bullish on equities that, investment in equity mutual funds has been positive continuously since March 2021 on net basis. Since then, not a single month has gone by where net-outflow of funds from equity mutual funds was witnessed.