Kotak Mutual Fund lifts investment restrictions in its smallcap fund | News on Markets

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Kotak Mutual Fund has lifted investment restrictions in its smallcap fund citing stability in smallcap stocks post the completion of general elections.

On February 26, 2024, the fund house announced that investors can put a maximum of Rs 200,000 as a lump sum each month and Rs 25,000 per month through the systematic investment plan (SIP) route.

The restrictions were placed amid a sharp run-up in smallcap stock prices and strong flow of fresh investments in smallcap funds.

Concerns over valuations and liquidity had forced several fund houses, including ICICI Prudential, Tata, and Nippon India, to limit inflows over the past 12-15 months.

Kotak MF said the earnings growth of smallcaps is expected to improve.

“We believe that the earnings growth of smallcaps is expected to improve, and companies are poised for robust earnings growth. As the economy continues to expand, smaller businesses are well-positioned to benefit, potentially supporting their valuations,” it said in an email to investors.

“While smallcaps have performed well in the past, it’s important to set realistic expectations. The returns seen recently are unlikely to continue at the same pace and may become more normalised. Hence, avoid the temptation to over-allocate based on recent performance,” the fund house added.


(Disclaimer: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)

First Published: Jul 02 2024 | 6:55 PM IST

Source: Latest News