The real alpha will still come from mid-caps and small-caps

Now the US is showing signs of slowing, while India is expected to maintain its growth rate.

- Dipti Sharma

Large caps might deliver historical returns of around 11%, but the real alpha will still come from mid-caps and small-caps, believes Mihir Vora, chief investment officer, TRUST Mutual Fund. "I would lean more toward small-caps than mid-caps," he said. Nifty 50 earnings are expected to grow around 10% over the next couple of years, and small-caps could still see growth of 16-17%, Vora explained. He expects the broader market to continue to outperform the large-caps.

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Are you spotting any fresh trends in what investors are gravitating toward?

In the stock market, we are seeing a clear move towards the financial sector, especially the larger banks and NBFCs (non-banking financial companies) after a long period of underperformance. IT (information technology) services are seeing negativity due to lower growth expectations and uncertainty regarding the US economic growth and US President Donald Trump's actions on trade and tariffs. Investors are also actively looking at gold in periods of higher inflation expectations. In mutual fund flows, we see that sector and thematic funds are seeing much lower flows while the flows to flexi-cap and diversified funds continue.

How are you dealing with the market chaos? Have you changed your strategy considering the market downturn now?