Ch.11 · Scheme Performance Disclosure Rules · hard
Why does AUM size matter when evaluating the performance of a small-cap or mid-cap fund?
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EXPLANATION
In small-cap and mid-cap segments, liquidity is limited. A very large fund trying to build or exit positions can significantly impact the stock price. This 'capacity constraint' means very large AUM can become a drag on performance — a key reason some AMCs close small/mid-cap funds to new investors.
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