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New Delhi, Strong, incessant net flows and favourable market conditions propped up the assets base for the small-cap mutual fund category to cross Rs 2 lakh crore mark in November-end, a sharp surge of 69 per cent from a year earlier. On a month-on-month basis, the Assets Under Management (AUM) of the category grew 10 per cent to Rs 1.99 lakh crore, data with the <keyword id="826589" type="General" weightage="80" keywordseo="association-of-mutual-funds" source="Orion">Association of Mutual Funds</keyword> in India (AMFI) showed. Since the fourth quarter of 2019-20, the AUM for the category has seen a phenomenal rise, due to favourable market movement, along with record net inflows. Small-cap funds attracted Rs 37,178 in this year (till November). This includes Rs 3,699 crore last month and a record fund infusion of Rs 4,495 crore in October. On the other hand, the large-cap category saw a pull out of Rs 2,688 crore in the first 11 months of this year. "A few fund houses have limited the inflows in their small-cap funds over the last quarter given the sharp rise in flows and concerns on valuations," <keyword id="112974" type="General" weightage="80" keywordseo="morningstar-india" source="Orion">Morningstar India</keyword> had mentioned in its September quarterly report. Going by the AMFI data, the asset base of the small-cap mutual fund hit its peak of Rs 2.2 lakh crore at the end of November. Additionally, investor accounts in the category, too, climbed a staggering 62 lakh folios to 1.6 crore in November from 97.52 lakh a year-earlier. This shows that investors have become more inclined toward small-cap funds. Under Sebi's rule, in small-cap mutual funds, fund managers are required to invest at least 65 per cent of their portfolios in small-cap stocks. <keyword id="2252616" type="General" weightage="80" keywordseo="g-pradeepkumar" source="Orion">G Pradeepkumar</keyword>, CEO, <keyword id="6536298" type="General" weightage="80" keywordseo="union-asset-management-company" source="Orion">Union Asset Management Company</keyword>, suggested that investors stagger their investments in small- and mid-cap funds in view of the possibility of short-term volatility. Overall, the AUM of the 42-player mutual fund industry reached Rs 49.04 lakh crore in November-end from Rs 40.37 lakh crore in November 2022, suggesting a gain of 22 per cent.

Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov

Wasatch Global Investors<ul class="summary-list"><li>Ken Korngiebel's Wasatch Micro Cap Fund beat 99% of its peers in 2019, and it's consistently stayed ahead of its peers throughout the last two decades. </li><li>Korngiebel is investing in companies that might have a short track record and depend heavily on a few key people.</li><li>He told Business Insider he makes sure he's getting his calls correct by zeroing in on these four areas.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>It's survival of the fittest in <a href="https://www.businessinsider.com/best-small-cap-stock-picks-mutual-fund-manager-ken-korngiebel-2020-1">Ken Korngiebel</a>'s portfolio.When he took over as manager of the <a href="https://www.morningstar.com/funds/xnas/wmicx/quote">Wasatch Micro Cap Fund</a> in 2017, he decided he wanted to shrink it. He's reduced the number of stocks in his portfolio to 75. And now that it's more concentrated, he won't add a new stock to the fund unless it's clearly better than one he already holds."There's always competition for capital," he told Business Insider in an exclusive interview. "A new idea needs to compared with an existing idea to see what might be better going forward."That's helped him raise the level of a fund that was already highly successful. The micro cap fund beat 99% of competing funds in 2019. Kiplinger ranks it as one of the <a href="https://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php?table_select=SmStock">10 best small-cap mutual funds over the past three, five, 10, and 20 years</a>. It's also picked up a five-star rating from Morningstar along the way.The small-cap landscape is a broad one and Korngiebel can't hang on to many companies that outgrow it, so the competition is intense.He explained that he's always looking for these four qualities before he adds a company to his fund.<h2>(1) Revenue growth</h2>"Revenue growth is where I start," Korngiebel said. "Without topline growth, ultimately you run out of bottom line growth."His portfolio is filled with two kinds of companies: Steady, mature businesses that are posting revenue growth in the mid-single digits, and companies that might be at an earlier stage, but are posting sales growth of 20% to 40% a year.For the latter group, he says it's vital that they're growing under their own power and not just snapping up their competition. "When you're dealing with micro caps and small caps, the types of stocks that we're looking for that can go on to be big companies, it begins with revenue growth and particularly organically," he said.<h2>(2) Economic power</h2>Korngiebel spends a lot of time examining companies that are in early stages of development, and when he does buy a stock, he expects to hang onto the stocks for five years. So he wants to know everything he can about the company's margins, profitability, competition, and how they might evolve over that time."Understanding the core economics of the business in terms of what's the margin profile today (and) what would that margin profile look like at more revenue scale" is critical, he said. "We want to understand the competitive intensity of the industry, because that directly influences how much market share a company is going gonna take and therefore what the future profitability of the firm looks like."<h2>(3) Outstanding management</h2>"This is a part of the market which is, I think, really dependent on your assessment of management because these aren't big companies," Korngiebel says. "The benches aren't as deep."When he's enthusiastic about a company, an exceptional management team is always a major reason. And he says he goes into a lot of depth in examining those companies."I have on a retainer a former investigative journalist who conducts background due diligence and interviews of former employees to help us understand certain questions we might have about any particular executive," he said.<h2>(4) Disruption</h2>"You're looking for companies that have innovative products, technologies that map on to large markets that have great business models," Korngiebel said of his highest-upside investments.At the end of 2019 a whopping 57% of his holdings were in either healthcare or technology companies. He says he targets those two industries because they're the best places to find the kinds of groundbreaking new technologies he can invest in.Combined with the other data he's gathered, that gives him a good idea about the trajectory of the companies he's evaluating."We can make some pretty educated forecasts about competitive environment with the likelihood is of capturing market share, significant revenue growth and ultimately cashflow and profitability," he said. <h3>NOW WATCH: <a href="https://www.businessinsider.com/oscars-academy-awards-rigged-best-picture-nominations-win-2019-2">There's a formula to winning the Oscars, and it's all in the statistics</a></h3>

The lead manager at the world's top-ranked small-cap fund crushes peers in the riskiest part of the market. He reveals the 4 attributes he looks for in a stock pick.

Wasatch Global InvestorsKen Korngiebel manages the Wasatch Micro Cap fund, the number-one small-cap mutual fund of the past 20 years.<ul class="summary-list"><li>Ken Korngiebel heads the <a href="https://www.morningstar.com/funds/xnas/wmicx/quote">Wasatch Micro Cap</a> fund, which has consistently crushed its peers for years and is the top-rated small-cap stock fund of the past 20 years, according to Kiplinger.</li><li>Korngiebel told Business Insider he has a "Do Not Touch" list of winning stocks he has no plans to sell even though they've enjoyed huge runups.</li><li>Because of the rules of his fund and the nature of small-cap investing, Korngiebel generally invests with a five-year time horizon. But there are a few companies he says he could hold "forever."</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Successful investors might have strict rules, but they also know it's worth making an exception if it's great enough.At the <a href="https://wasatchglobal.com/wasatch-micro-cap-fund/">Wasatch Micro Cap fund</a>, Ken Korngiebel has to invest at least 80% of his money in small companies - generally ones valued at $1.5 billion or less. For the most part that means he's buying stocks based on what he expects over the next five years.But a few are going to stick around long after they outgrew that designation. He says they've earned a spot on his "Do Not Touch" list because their growth means that if he sells the shares, he can't buy them back later. While he often sells winners when the time is right, he has no plans to part with them.Korngiebel, who has run the fund since 2017, is taking over from a long line of winners himself: Kiplinger ranks Wasatch Micro as the <a href="https://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php?table_select=SmStock">best small-cap fund of the past 20 years</a>. He's maintained that level, with a five-star rating from Morningstar over the past few years. The fund beat 98% of its peers last year with a 42.2% return. "I would hold indefinitely if it's a company I love and think is a future dominator," he told Business Insider in an exclusive interview. "If we can hold forever that would be awesome, and so long as that investment thesis is intact, then we're going to hold the stock."Here are three of those stocks, and the reasons he is still enthusiastic about each. In addition to being optimistic about their growth and future profits, Korngiebel highlights their management teams as a key reason for these investments.<h2>(1) Five9</h2><a href="https://markets.businessinsider.com/stocks/fivn-stock">Five9</a> provides cloud software for call centers, and its stock is up 1,676% in the last five years to bring its valuation to more than $4 billion, well out of small-cap range.Korngiebel says it's doing a very good job managing the complex transition of becoming a larger company, praising Chairman Mike Burkland, who was CEO for almost a decade, and recent replacement Rowan Trollope. And he thinks Five9 has room for a lot of dramatic growth."It's a market that has been slow to adopt the cloud. It's probably 10% to 15% penetrated, so there is a large installed base that still needs to migrate from on-premise to the cloud," he said. "It's got fantastic economics to the business model. It's got a great management team. And it's got less competitive intensity now than it was, say, four or five years ago. That's an example of characteristics that I would die to invest in all day long."<h2>(2) Medallia</h2><a href="https://markets.businessinsider.com/stocks/mdla-stock">Medallia</a> makes software that helps companies track the satisfaction of their customers and their employees, and Korngiebel says companies are only beginning to realize how vital that data is."This is, I think, a really exciting, huge market that has burst onto the scene in the last four or five years," he said. "They're seen as mission critical because this directly influences the revenue growth and the customer retention metrics that are so important to maintaining a healthy business."Within that growing industry, he says the company has built up a big advantage by winning numerous big banks and airlines as customers, making it "the leader by far" in its industry.Korngiebel says he first invested in the company before it went public at about $6 per share, far below its IPO price of $21 and its current level of $30. One reason for that is his belief in the track record of CEO Leslie Stretch."The best predictor of future success is past success," he said. "Looking at somebody's track record of accomplishment, I think, is important to understand what the likelihood of future success would be."<h2>(3) FreshPet</h2>Shares of pet food retailer <a href="https://markets.businessinsider.com/stocks/frpt-stock">FreshPet</a> have rocketed about 700% in four years. Korngiebel says it helps that pets love the product, but another reason is the "phenomenal" management team including CEO Billy Cyr and president Scott Morris, who have successfully increased awareness of their brand and gotten customers to spend more - with a lot of room for improvement remaining."This is an example of a management team that is more skilled than the market cap of the company at the time we invested in it," he said. "When we bought it, the debate was can they get to $300 million [in revenue], and the market had its doubts. Then it was $500 million. And now the debate is, is this a $1 billion-plus annual revenue opportunity?" <h3>NOW WATCH: <a href="https://www.businessinsider.com/why-camel-milk-is-so-expensive-2019-12">Camel milk can cost $30 a litre. Why is it so expensive?</a></h3>

Ken Korngiebel manages the best small-cap fund of the last 20 years, making his living in the riskiest part of the market. Here's how he does it - and the 3 stocks he'll never sell.

The <keyword id="20340200" type="General" weightage="100" keywordseo="assets-under-management" source="keywords">Assets Under Management</keyword> (<keyword id="20019621" type="General" weightage="20" keywordseo="AUM" source="keywords">AUM</keyword>) of <keyword id="20300870" type="General" weightage="20" keywordseo="equity-mutual-funds" source="keywords">equity mutual funds</keyword> have <keyword id="20641508" type="General" weightage="20" keywordseo="surged" source="keywords">surged</keyword> by 5.37 per cent sequentially to Rs 25,12,845.59 crore in July 2024 from Rs 23,84,727.69 crore in June 2024, <keyword id="22838645" type="General" weightage="20" keywordseo="PL-Wealth-Management" source="keywords" meta.keywordsubtype="org" meta.entityname="PL Wealth Management" meta.hostid="261" meta.entityid="PL Wealth Management">PL Wealth Management</keyword> said in a statement. The observation, which is based on 283 open-ended equity diversified funds, cited that 39 per cent of these funds have outperformed their respective benchmarks over the past month, ending July 31st, 2024, The cumulative total of funds that outperformed stood at 109 during the month ending July 2024 (one month). AUM measures the total market value of assets that a person or entity manages for clients or on behalf of investors. Under the <keyword id="21184260" type="General" weightage="20" keywordseo="large-cap-funds" source="keywords">large-cap funds</keyword>, about 58 per cent of <keyword id="19915334" type="General" weightage="20" keywordseo="schemes" source="keywords">schemes</keyword> outperformed on S&amp;P BSE 100 - TRI benchmark, out of 31 schemes observed by <keyword id="19999821" type="General" weightage="20" keywordseo="Prabhudas-Lilladher" source="keywords" meta.keywordsubtype="org" meta.entityname="Prabhudas Lilladher" meta.hostid="261" meta.entityid="Prabhudas Lilladher">Prabhudas Lilladher</keyword>'s wealth management arm. About 24 per cent of schemes outperformed under the large and mid-cap funds, of which 29 were observed. Under the multi-cap funds about 40 per cent of schemes outperformed, whereas in the flexi-cap funds, the percentage of schemes outperforming was 33 per cent. Going further, about 38 per cent of schemes under the midcap outperformed. Interestingly, the data observed that not a single scheme in small-cap funds manages to outperform their respective benchmarks. According to the observations made by L Wealth Management, Value Contra Div Yield Funds was the best-performing category, where 78 per cent of the schemes outperformed the benchmark. It was followed by schemes of large-cap funds and multi-cap funds, which outperformed their respective benchmarks by 58 per cent and 40 per cent respectively, during July 2024. Large and mid-cap funds were the least performing fund category, with only 24 per cent of funds outperforming the benchmark, as shown in the analysis. <keyword id="22838646" type="General" weightage="20" keywordseo="PL-Capital-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="PL Capital Group" meta.hostid="261" meta.entityid="PL Capital Group">PL Capital Group</keyword> specialises in research-driven advisory services in the Indian capital markets. The company's business is spread across 200 plus cities in India, catering to institutions, corporations, family offices, HNIs, and retail clients in India and globally.

Assets Under Management of equity mutual funds surged 5.4% sequentially in July: PL Wealth Management

<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword>, Equity mutual funds experienced a net inflow of Rs 21,780 crore in January, making it the highest monthly infusion in nearly two years, propelled by investors' continued preference for small-cap funds. In comparison, an inflow of around Rs 17,000 crore was seen in the category in December, according to the data released by the <keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> (<keyword id="6359050" type="General" weightage="20" keywordseo="amfi" source="Orion">AMFI</keyword>) on Thursday. The flow in January was the highest since March 2022, when equity-oriented mutual funds witnessed an inflow of Rs 28,463 crore. Also, the latest flow marks the 35th consecutive month of net inflows in equity funds. Barring value fund, all categories experienced inflow in equity segments. The category was aided by fund collection to the tune of Rs 4,805 crore in thematic funds, followed by Rs 3,257 crore in small-cap funds and Rs 3,039 crore in multi-cap funds. The highlight of this month was the fund flows into the large-cap category at Rs 1,287 crore, which was at the highest-level in more than 13 months. "With midcaps at 15 per cent and small caps at 20 per cent premiums, investors are realising the considerable valuation gap with the large-cap segment, and accordingly making adjustments to their investments. "Though small-cap funds garnered greater than Rs 3,000 crore of net flows for the fourth consecutive month, the quantum was lower by Rs 600 crore on a month-on-month basis," <keyword id="20504519" type="General" weightage="20" keywordseo="gopal-kavalireddi" source="keywords">Gopal Kavalireddi</keyword>, Vice President of Research at FYERS, said. Apart from equities, debt-oriented schemes witnessed a net inflow of Rs 76,469 crore in January after withdrawing funds in the preceding two months. The segment had witnessed a net outflow of Rs 75,560 crore in December and Rs 4,707 crore in November. Additionally, hybrid schemes saw an inflow of Rs 20,637 crore. Overall, the mutual fund industry has witnessed an inflow of Rs 1.23 lakh crore in the month under review as compared to an outflow of Rs 40,685 crore in December. The strong inflow pushed the mutual fund industry's assets under management to Rs 52.74 lakh crore in January-end as compared to Rs 50.78 lakh crore at the end of December.

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Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov

PTI

The lead manager at the world's top-ranked small-cap fund crushes peers in the riskiest part of the market. He reveals the 4 attributes he looks for in a stock pick.

Marley Jay

Ken Korngiebel manages the best small-cap fund of the last 20 years, making his living in the riskiest part of the market. Here's how he does it - and the 3 stocks he'll never sell.

Marley Jay

Assets Under Management of equity mutual funds surged 5.4% sequentially in July: PL Wealth Management

ANI

Equity mutual fund inflow hits almost 2-yr high of ₹21,780-cr in January

PTI

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