New Delhi, Oct. 22 -- Small-cap mutual funds now need less time to sell their holdings in a stress scenario, even as the money they manage has grown by about 30% this year. As of September, the average small-cap fund would take 11.9 days to sell half its portfolio, down from 18.8 days in January. That is according to stress-test data that fund houses disclose for mid- and small-cap funds through the Association of Mutual Funds in India (Amfi). The time needed to sell a quarter of the portfolio has fallen to 6.2 days from 9.6 days.

These disclosures began in March 2024. Money had poured into small- and mid-cap funds through 2023, and valuations in the segment had risen sharply. Madhabi Puri Buch, who was chairperson of the Securities and ...