After a tough year, fund managers bet on mid- and small-caps for 2020

Expect broader markets to bottom out, with valuations capping further downside

Mid and small-cap stocks, which had a difficult last year, can get their mojo back in 2020, say domestic fund managers.  They expect the stocks of smaller-sized companies to start staging a strong recovery after the economy starts to respond to the government’s efforts to revive growth. 

"Mid- and small-cap stocks can be attractive investment opportunities for the next year, following the lack of broader market participation for the last two years. Valuations have slid to reasonable levels, limiting further downside," says Anoop Bhaskar, head of equity at IDFC Mutual Fund (MF).

"Divergence between the Nifty and mid- and small-caps