Good to see that despite the kind of volatility that we have seen in the stock markets, the SIP data continues unabated. What is your own expectation of what the next realistic target should be for the SIP figures on a monthly basis?
Swarup Mohanty: It has become the go-to way of investing broadly for Indians. It is such a wonderful process of investing. It does allow investors to catch volatility like this and then over a period of time, the rupee cost averaging does set in. So, the process of investing through SIP is always the disciplined way and hence I think more and more Indians are catching on to it, 19,200 per month as we speak. My figure for December 2024 is 25,000. I do not see any stoppage of this at all. So, yes, I mean, great to be at the receiving end of the SIP flows.

It is important to now see what kind of schemes are getting maximum investments because there is still an insatiable appetite for midcaps and smallcaps in the market. Would you say that maximum flows are coming into flexi cap funds or at least that has been the trend?
Swarup Mohanty: Till now, I would suspect that the maximum flows till last month were towards the mid and smallcaps, more towards the smallcaps. But this month’s figures show a slight halt in the smallcap space and if people in the past have allocated higher to these places, it is always good to rebalance and come back to the core portfolios.

I hope that in the next few months we see flows reverting to the core portfolios of large, flexi, or maybe multi as such. But too much of skewness towards smallcaps only increases the risk profile of the portfolios. People are cognisant of that. If they are okay with it, all good. But I would suspect a lot of it was blatant return chasing. But if that is then normalised by future flows into the core portfolios, a lot of good can happen to the stability of portfolios.

Should the recommendation going forward and looking at the market valuations within various market caps right now, be a higher allocation to largecaps as opposed to smallcaps?
Swarup Mohanty: Yes, because I am making this assumption purely on the flows that have happened in the last two years. A lot of allocation has happened to that end of the market. If you have followed data, then people would have redeemed out of largecaps to go there and that is never advisable in the long run. Finally, every fund manager will ask you to buy a good company at a good price. You have to decide how much of your portfolio is invested in good companies and the good companies are invariably the larger companies which have more from a balance sheet stability perspective. So, if you have bought more of the smaller companies, it is time to rebalance and that would be the right way of going ahead.