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Trim exposure if it exceeds 20%, avoid complete exit

Business Standard

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March 19, 2025

Smallcap funds have declined 21.6 per cent over the past three months.

- SANJAY KUMAR SINGH & KARTHIK JEROME

SANJAY KUMAR SINGH & KARTHIK JEROME

Many investors, who were highly bullish on this segment during the bull run of 2023 and 2024, are a shaken lot today. They must adopt the mantras of asset allocation and long-term investing to weather this phase.

Volatility may continue

The inflated valuations of small-cap stocks are getting corrected. "After Covid, small and midcap companies experienced faster growth than large caps, leading to significant rerating. The decline over the past six months reflects a reversal of this rerating," says Shreyas Devalkar, head-equity, Axis Mutual Fund.

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