Edelweiss CEO Radhika Gupta reveals the best way to take mid and small cap exposure through mutual funds
In a post on social media platform X, Edelweiss' Radhika Gupta highlighted the significance of adopting a well-balanced, diversified approach and staying invested for a minimum of 10 years or more.
Edelweiss MF CEO Radhika Gupta shared her perspective on the ongoing discussion around mid-cap and small-cap SIPs, encouraging investors to steer clear of panic and instead prioritize disciplined, long-term investment strategies.
In a post, Gupta highlighted the significance of adopting a well-balanced, diversified approach and staying invested for a minimum of 10 years or more.
“The SIP was meant to be a simple savings-investment instrument for the common person. A fill it, shut it, forget it one because most people struggle to markets, market caps and SIPs,” Gupta said.
SIP contributions surges to ₹26,000 crore
Gupta highlighted that monthly SIP contributions have surged to ₹26,000 crore, with a large number of investors relying on this investment approach. This widespread confidence is essential in maintaining stability in the capital markets, particularly during times of substantial FII withdrawals.
Additionally, Gupta emphasized the innovative aspect of SIPs, which address both investment goals and the routine savings needs of Indian investors. The mutual fund industry has effectively designed this tool, making it attractive to a diverse group of investors across the country.
“Everything including mid and small is good in balance. Even an average flexi cap fund has 30% allocation to this category. If you look at the returns of anything from the top of the cycle to the bottom (e.g. 2006 to 2013), they will not look pleasant. Liquidity is very important and can be managed. We have disclosed liquidity numbers in our funds well before regulators asked and maintain this liquidity, without taking cash calls or holding a lot of large cap. The critical thing that no one can disagree about is that the key to making money is to hold on to SIPs for a long time. 10 years,” she added.
She further went on to say, “Don't fall for fear mongering or 10 day debates. Focus on finding a good manager and holding for 10 years, in a sensible balanced way.”
Last week, S. Naren, the Chief Investment Officer of Prudential ICICI AMC and a widely regarded fund manager, stated that valuations in the small- and mid-cap segments were excessively high. He strongly advised investors to exit these segments entirely. Additionally, he emphasized that Systematic Investment Plans (SIPs) are most effective in volatile and undervalued asset classes.
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