The BSE SmallCap index gained 106 per cent in the one year ended May 12, 2021.
The S&P BSE Small-cap index has recovered 26 per cent as compared to a 23 per cent rise in the S&P BSE Sensex.
'We would advise investors to hold on to multi-cap funds and not invest further until further clarity emerges.'
The mid-and small-cap segments at the bourses have outperformed their larger peers thus far in fiscal 2023-24 (FY24). While the S&P BSE Small-cap index has surged around 5.7 per cent in FY24, the S&P BSE Midcap index has gained 4 per cent during this period. In comparison, the S&P BSE Sensex has moved up around 2.2 per cent.
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Small-cap stocks raked in big gains in fiscal 2021-22 by giving up to 36.64 per cent returns, outshining the bigger benchmark gauge and experts believe that they may continue to outperform in FY23. Markets faced many headwinds in the latter part of the last fiscal with the emergence of geopolitical tension, inflation concerns and FII selling. Analysts said that the first half of the last fiscal was very good, while the market entered into consolidation in the second half, combined with high volatility.
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'As valuations of large-caps appeared to be out of whack, investors started lapping up quality mid-caps and small-caps, which were available at relatively comfortable valuations.'
Their share in overall market capitalisation of BSE stocks has risen to a four-year high
Majority of equity linked savings schemes as well as mid and small-cap funds outperformed their respective benchmark indices over a five-year period ended December 2015.
Real test of the rally in this segment will be the upcoming result season.
Small-cap funds have enjoyed a massive run-up over the past year. The category has turned in an average return of 109 per cent - the best-performing fund has yielded a humongous 201 per cent. Many investors, however, are concerned whether the category has turned risky after such a sharp rise.
'Allocate 30% to 35% of your equity portfolio to mid-cap funds and 10% to 15% to small-cap funds.'
The one-year returns for equity-oriented mutual fund (MFs) schemes have largely mirrored the gains made in the secondary market. However, schemes that invest in infrastructure (infra), small-cap, and public sector undertaking (PSU) banks have emerged standout performers, with gains in excess of 100 per cent in some cases. Of the total 484 equity schemes, 353 have managed to beat the Sensex, reveals the data provided by Value Research. Around 20 have delivered returns in excess of 90 per cent and six schemes have given returns of over 100 per cent in the past one year. The S&P BSE Sensex Total Return Index (TRI) has given returns of 51 per cent in the last one year, ended October 29.
Portfolio returns, say analysts at Morgan Stanley, are more likely to be driven by bottom-up stock-picking rather than top-down macro forces.
Largecap equity funds remain suitable for conservative and moderate risk-taking investors seeking relatively stable returns.
The mid- and small-cap indices had a dream run between January 2017 and January 2018 - zooming 48 per cent and 56 per cent, respectively.
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 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.
'Once the currency goes out of the hand, then possibly your major challenge is that it will not come back.'
Mid-cap and small-cap stocks on the BSE were on the buyers' radar on Tuesday as investors booked profits in large-cap shares and the benchmark Sensex fell 264.57 points from a record close.
So far in September, the S&P BSE Small-cap index has gained nearly 3 per cent as compared to a modest 0.2 per cent dip in the S&P BSE Sensex.
BSE small-cap index, which ended over 1% higher, outperformed the benchmarks significantly.
The underperformance comes amid liquidity concerns in the non-banking finance companies space and Essel Group default news.
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.
'As re-industrialisation gathers pace across regions like Asia, Europe and the US, a wide range of products and inputs will see demand.'
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
The central bank is yet to consider actions such as a rate hike or mobilising dollar inflows from non-resident Indians to boost forex reserves as it cannot afford to continue with them for long when the rupee's internationalisation tops its agenda, explains Tamal Bandyopadhyay.
Exposure to these funds should not exceed 10% to 15% of the equity portfolio and the investment horizon should be at least seven years.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
Indian equities are experiencing their sharpest rebound in years, with the BSE 500 index rallying 12.1 per cent so far this month, echoing Covid-era recoveries despite ongoing geopolitical uncertainty and earnings risks.
Bluechips underperform in recent rally.
The BSE mid-cap Index will include shares of Allied Digital Services, Cals Refineries, Century Plyboards, Gammon Infra, Hindustan Oil Exploration, Indiabulls Securities, Jai Balaji Industries, Jet Airways, Jindal Drilling, Puravankara Projects, Rain Commodities, S Kumars Nationwide, Shriram City Union Finance, Thermax and Thomas Cook India.
Do not exit in panic or buy falling stocks without reassessing fundamentals; instead, build a watchlist and invest gradually with a disciplined, long-term approach.
Small cap stocks can sometimes surprise by yielding large returns to investors.
Ehsan Malinga shines amid a record SRH chase against MI, claiming the Purple Cap with a disciplined spell and continuing his impressive rise in IPL 2026.
The ongoing West Asia conflict is expected to severely impact the supply of affordable housing in India, as rising input costs further erode already thin developer margins. Fluctuations in crude oil and gas prices, coupled with higher freight costs, are driving up prices of essential construction materials like cement and steel, making new projects increasingly unviable for developers.
The unlocking of the economy since June led to a significant recovery in various macro, micro and high-frequency data points, resulting in the equity markets surpassing their previous lifetime highs.
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