This time wont be different. If such high fund flows are into small cap, they will go down heavily with slight market correction. Howard Mark’s book about Market cycles indicate this very clearly. We are currently at peak of small cap funds rally. We need to exit small cap funs to save our profits and when picture becomes gloomy, then we need to re-enter. Small cap funds works like that only 2-3 years rally and then 1-2 years gloomy period. Small cap funds dont work like flexicap funds - secular growth. After watching this PPFAS funds , i redeemed my small cap funds investmemts partially and will go into flexicap at this juncture. That way this presentation was good for me. But i have not lost faith in small cap funds, only that i will return in gloomy period again.
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