By Jayshree P Upadhyay
(Reuters) – The Association of Mutual Funds in India (AMFI) an industry body for asset managers, on Tuesday asked members to moderate inflows into small and mid-cap funds to protect investors, after strong inflows raised concerns of a potential crash.
AMFI made the request in a letter dated February 27, which has not been previously disclosed. It came following a communication from India’s market regulator.
Small and mid-cap funds have seen high inflows, causing concern among authorities about how they would hold up in the event of a sharp market selloff.
The Nifty small cap 250 index (.NISM250) has surged 71% over the past 52 weeks and the Nifty mid cap 100 index (.NIFMDCP100) is up 64%. That far exceeds the benchmark Nifty’s (.NSEI) 28% rise.
The Securities and Exchange Board of India (SEBI) has also asked fund houses to provide more information about risks associated with such funds, Reuters reported on Tuesday.
(Reporting by Jayshree P Upadhyay; Editing by Sharon Singleton)
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