Small-cap funds can be rewarding for those who can stomach volatility

Limit investments in this space to 10-15% of your corpus, though; pay attention to fund size

Plan your investment and take the advice of experts to secure your financial freedom. (Stock photo)
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Since the small-cap universe is very large, and it’s not tracked as extensively, there is a greater possibility of fund managers finding hidden gems.

Sarbajeet K Sen New Delhi
The stock market has shown considerable strength in recent weeks, with the indices moving up swiftly. Year-to-date, however, small-cap funds have remained flat (0.9 per cent). Over longer periods of three, five and 10 years, however, small-cap funds have rewarded their investors handsomely. After the recent bout of volatility (between October 2021 and June 2022), one question on investors’ minds today is whether this is a good time to enter small-cap funds.

“Small-cap funds are always a good investment for long-term investors who have the patience to live through the volatility associated with equity markets in general and small-caps in

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First Published: Sep 02 2022 | 6:01 PM IST

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