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Flexi-cap funds mimic large-cap schemes

Fund managers justify change in strategy due to altered growth prospects and higher valuations

Sanjay Kumar Singh 

Many of the large flexi-cap funds have shifted decisively towards large-cap stocks and have a lower allocation to mid-caps than, say, three years ago, when the mid-cap rally began. Fund managers attribute this shift in allocation to the altered growth prospects and valuations of these two sets of stocks.

The run-up in mid-caps has made these stocks expensive. While the Nifty is currently trading at a 12-month trailing price to earnings (P/E) ratio of 23.73, the Nifty Free Float Midcap 100 Index is at a P/E of 35.12. The market remains optimistic about these stocks. “The higher ...

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First Published: Wed, August 10 2016. 23:26 IST