Emergence of Mid-cap and Small-cap funds in India
Unit Linked Insurance (ULIP) plans. The AUM of the Indian MF Industry has grown from ₹9.03 trillion as on January 31, 2014 to ₹52.74 trillion as on January 31, 2024 around 6 fold increase in a span of 10 years. The Indian Insurance market is expected to reach US$ 200 billion by 2027 and the country is the ninth-largest life insurance market globally.
As per the Insurance Regulatory and Development Authority of India (IRDAI), India will be the sixth-largest insurance market within a decade, leapfrogging Germany, Canada, Italy and South Korea. By investing in mutual funds & ULIPs, retail investors are looking at maximizing long term wealth creation through a diversified portfolio of Large Cap (top 100 companies by full market capitalization), Mid Cap (top 101st to 250th company by full market capitalization) & Small Cap (251st onwards company by full market capitalization). While Large Cap companies are well established businesses with significant market share, however, MidCap and SmallCap companies with significantly higher growth potential have seen substantial investments coming in recent time.
This is evident from the fact that Midcap companies now account for 18% of total market capitalization as compared to 12% in 2013. MidCap & Smallcap segment has higher representation of companies which are domestic-focused and they tend to benefit more when the domestic economy witnesses higher growth. Here's a breakdown of the key differences between small-cap, mid-cap, and large-cap companies.
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