Investors now have 27 passive smallcap funds to choose from 17 index funds and 10 ETFs.
The remarkable rise of smallcaps reflects the emergence of a broad set of specialised businesses operating in industries where the sectoral tailwinds remain considerably stronger than macroeconomic headwinds, points out Debashis Basu.
Most actively-managed equity mutual fund schemes outperformed their benchmarks despite volatility across domestic equity markets during the past year.
'Except for extremely conservative investors, others can consider allocating 10 to 20 per cent of their portfolio to small caps.'
Despite geopolitical tensions and FII outflows, Indian small and midcap stocks have not only recovered losses but are also outperforming largecap indices, driven by attractive valuations, domestic institutional support, and a rebound in earnings.
The BSE Smallcap index hit an over eight-month low of 47,627.96, falling 3 per cent in Tuesday's intraday trade amid selling pressure due to ongoing tariff-related concerns and rising geopolitical tensions.
After two years of strong gains, smallcap stocks fell sharply in 2025, but the correction may be setting up opportunities for long-term investors.
Unless the primary market momentum slows, smallcap stocks will stay subdued.
In April alone, they snapped up shares worth Rs 19,664 crore, recording their biggest buy since October 2024.
Companies in the lower mcap deciles have recorded the fastest growth in median mcap.
Over 50 per cent, or 660 stocks, from the BSE 1000 index recorded negative returns during CY25.
Investors seeking higher returns at relatively higher risk should consider allocation to smallcap equity funds.
Net mutual fund inflows into active equity schemes in India plummeted by 40 per cent month-on-month in May, reaching a one-year low of 22,908 crore, primarily due to weaker lump-sum investments and increased redemptions amidst significant market volatility and global uncertainties.
Indian benchmark indices Sensex and Nifty closed flat, paring early gains due to renewed hostilities between the US and Iran, which unsettled investor sentiment and led to profit booking in metal, oil & gas, and telecom shares.
Net investments into equity mutual fund schemes in India remained elevated at approximately 38,440 crore in April, despite a slight dip from March's high and a 3% month-on-month decline in Systematic Investment Plan (SIP) inflows.
Accenture's revised annual revenue growth forecast and weaker-than-expected fourth-quarter guidance have sent shockwaves through the Indian IT sector, causing major IT stocks and the Nifty IT index to tumble significantly.
This marks a rebound after more than two years of underperformance during a strong rally in smallcap stocks.
Amidst a sharp run-up in gold and silver prices, investors are advised to rebalance their portfolios by booking partial profits in precious metals and reallocating to domestic equities and debt, according to financial experts.
Small- and midcap stocks have delivered their biggest monthly rally in 12 years, but rising oil prices and global tensions could make the road ahead volatile.
LAMF allows investors to access liquidity while staying invested.
'Defence, capital goods, engineering, capital market-related stocks, autos, and cement sectors are my bullish bets for Samvat 2082.'
Domestic Institutional Investors (DIIs) have significantly increased their holdings in Nifty 500 companies, reaching a record 20.9 per cent by the end of March, while Foreign Portfolio Investors (FPIs) reduced their ownership to an all-time low of 17.1 per cent, according to Motilal Oswal Financial Services.
'... with the rest split between mid and smallcaps, as valuations are becoming more attractive across segments.'
Indian investors have seen their wealth erode by a staggering Rs 16.77 lakh crore over four trading sessions, as the markets faced deep losses driven by elevated crude oil prices, geopolitical tensions, persistent foreign fund outflows, and a record-low rupee.
Investors can begin investing in mutual funds with as little as Rs 100.
Is the current rally telegraphing a durable peace plan in West Asia, boosted by United States (US) President Donald Trump's incoherent and contradictory posts on social media?
'As re-industrialisation gathers pace across regions like Asia, Europe and the US, a wide range of products and inputs will see demand.'
Indian benchmark indices Sensex and Nifty experienced declines due to a sharp rally in crude oil prices, continuous foreign fund outflows, and geopolitical uncertainties. Regulatory developments in the banking sector, particularly the implementation of the Expected Credit Loss (ECL) framework, also contributed to the selling pressure.
Net inflows into equity mutual fund schemes moderated in FY26, falling by 27 per cent to about 3 trillion till February, as choppy markets and global uncertainties prompted investors to shift towards safer options like hybrid funds and gold ETFs.
Indian benchmark stock indices, Sensex and Nifty, closed nearly 1 per cent lower following the collapse of US-Iran negotiations, which heightened concerns of a prolonged conflict in West Asia and drove crude oil prices sharply higher.
New demat account additions in India reached an 11-month low in March, with only 2.15 million new accounts opened, significantly below the 12-month average. This slowdown is attributed to a sharp decline in equity markets, escalating West Asia tensions, and increased crude oil prices impacting India's economic outlook.
'In investing, poor sentiment is always a good vintage to build a portfolio.'
'The next phase of India's IPO cycle will be defined by quality, pricing discipline and investor selectivity.'
Indian markets on Dalal Street rallied sharply as easing tensions in the US-Iran conflict and stable oil prices boosted sentiment. Track Nifty 50 and BSE Sensex performance and key global triggers.
Indian investors have seen their wealth erode by a staggering Rs 48.29 lakh crore since the West Asia war began on February 28, leading to a significant downturn in the BSE Sensex and NSE Nifty, driven by geopolitical tensions and rising crude oil prices.
Fixed deposits from nationalised banks delivered higher returns than equities, outperforming both inflation and stock market benchmarks.
Indian stock market indices Sensex and Nifty closed nearly 1 per cent higher, marking their third consecutive day of gains, supported by a slight decrease in crude oil prices and positive global market trends.
The BSE Sensex and the Nifty 50 declined around 4.5 per cent each since the start of the West Asia conflict.
Flexicap fund performance depends heavily on the fund manager's decisions.
Trade deals ease risks for Indian equities, but weak demand and stretched valuations raise questions over whether optimism -- especially in smallcaps -- can turn into a sustained bull run, points out Debashis Basu.
