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Is it advisable to invest in mutual funds with an AUM of more than 10,000 crores?

Dhirendra Kumar says when would the size of a fund be an advantage and when would it be a disadvantage

Answer transcript: Size is a matter of concern but many a times, is also an advantage. If you are investing in large cap funds, the liquidity of those funds is good enough. If you are investing in a liquid fund, the bigger the better. Large funds will be able to provide you with superior economies, lower expenses, and if faced with a calamity they will be able to withstand it better.

When it comes to mid and small cap funds, it becomes very challenging if they cross a 2000 or 3000 crore asset base. The DSP BlackRock Micro-cap Fund recently had to stop taking money because it found it difficult to manage that size. Some funds may be at a disadvantage if they get bigger. And the ones which are likely to get hugely disadvantaged are the small and midcap funds when they get big. With multi and large cap funds, even if they have 10,000-20,000 crore, I don't think it is that much of a concern.

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