52%: Category average return of small-cap funds since their March 23 lows.

Business Standard
27th August

52%: Category average return of small-cap funds since their March 23 lows.

  • Small-cap funds have given an average return of 52 per cent to investors from the lows that the markets had touched on March 23.
  • Large-cap funds and mid-cap funds have both given returns of 46 per cent over this period.
  • Mid- and small-cap funds have been underperforming since February 2018. Currently, they are more attractively valued than large-caps.
  • However, investors must remember that an economic downturn generally hits smaller companies harder. Larger ones tend to be more resilient in such times.
  • Investors need to stick to an asset allocation of, say, 70 per cent to large-caps, 20 per cent to mid-caps, and 10 per cent to small-caps (they may allocate more to large-caps and less to mid- and small-caps if they are very conservative, or vice versa).

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