Smallcap funds: Normalised valuations make a case for long-term investors

Allocation should be commensurate with investor's risk appetite and horizon

Smallcap equity funds have returned to prominence, with several fund houses rolling out new offerings in this category. The DSP Nifty Small Cap 250 Index Fund and its exchange-traded fund (ETF) recently opened for subscription. Over the past month, two actively managed smallcap new fund offers from Helios Asset Management Company (AMC) and Samco AMC closed for subscription. Two ETFs from Groww AMC and Mirae AMC also began trading. These additions expand the already large universe— 58 funds with assets under management worth ~3.86 trillion—of active and passive funds available.

 

These launches come at a time when smallcap funds have