New Delhi, Oct. 15 -- If you are looking to invest in sectoral mutual funds, it is important to check market sentiment and the factors driving it.

According to the latest quarterly note, Quarter of Divergence: Resilient India, Restless World, by Prateek Nigudkar, Senior Fund Manager at Shriram AMC, the first half of FY27 has seen a sharp divergence between large-caps and the broader market. The Nifty 50 gave up most of its first-quarter gains, falling about 6% in September alone.

The Nifty 50 rose just 1.3% in H1FY27, while the Nifty Smallcap 250 gained 24.6%. Nigudkar attributes much of this performance gap to contrasting investment flows, noting that large-caps now offer better valuations relative to their historical averages.

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