Investors should limit their allocation to smallcap funds at 15-20%

Book profit if you have become overweight after the recent run-up

Small caps have been the most vibrant segment of the Indian stock market for some time now.

Currently, new fund offers of Motilal Oswal Small Cap Fund and DSP Nifty Smallcap250 Quality50 Index Fund are open for subscription.

Twenty-six smallcap schemes managed assets worth Rs 2.2 lakh crore on November 30.

“There is strong earnings growth momentum in smallcap stocks. Multiple factors such as healthier balance sheets, rising weight of smallcaps in the market, strong earnings momentum and resultant reasonable valuations could be beneficial to the next wave of smallcap investors,” says Akhil Chaturvedi, chief business officer, Motilal Oswal Asset