Day trading distorts valuations

Investors should be very careful under the circumstances when entering small-caps, in particular

Topics
Mutual Funds

Devangshu Datta 

Devangshu Datta

There has been an odd shift in retail investor attitude in the past month or two. Retail investors are buying shares but they’re doing it directly. Investment through mutual funds has slowed. Systematic investment plan (SIP) volumes eased off in Q1, 2020-21 and so have other equity mutual fund inflows.

At the same time, daily trade volumes are up considerably. Small-caps have led and outperformed other segments during the market recovery of the past four weeks. This is always a sign of retail interest. Delivery ratios have also fallen, which means day-trading is up with traders ...

First Published: Sun, July 12 2020. 21:06 IST