Small-cap funds' avg return stands at 100%

Mumbai: As small-cap and mid-cap funds continue their outperformance amid the pandemic, an ICICI Securities report has said that the category average return of small-cap funds has been around 100 per cent in the past one year.

"Small-cap funds and mid-cap funds continue to outperform since last one year with category average return of small-cap funds at around 100 per cent in the last one year," it said.

Further, the credit risk funds and medium-term funds are outperforming as a stable yield environment led to higher return in these higher YTM funds. Also, global funds have seen underperformance in the last one year as Indian markets have seen outperformance, noted the report.

Within large cap-oriented ETFs, Nifty Next-50 and Sensex Next-50 have seen outperformance over Nifty-50 ETFs for the last six months. Smart beta ETFs like NV 20/Low Vol 30, Quality 30, among others have underperformed. In thematic ETFs, PSU Bank ETF has delivered the highest return in the last six months at 35 per cent.

On the market outlook, the ICICI Securities report said that the mid-cap and small-cap funds are better placed. Earnings growth during a recovery phase is likely higher in mid-caps and small-caps in comparison to large caps whereas multiple expansion could further aid additional returns.