Should You Increase Your Small-Cap Fund Investments Now?
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Small-Cap Funds: Opportunity or Danger? Experts Weigh In on Current Market Reset
M
Moneycontrol•23-02-2026, 19:12
Small-Cap Funds: Opportunity or Danger? Experts Weigh In on Current Market Reset
•Small-cap stocks have seen a significant reset, with nearly half trading 40% below all-time highs, indicating a valuation compression phase.
•Experts suggest this period, marked by both time and price correction, presents a rational window for gradual exposure building, not aggressive positioning.
•Small caps offer higher long-term growth potential (Nifty Smallcap 250 SIPs delivered 17% CAGR since 2016) but come with sharper volatility.
•Industry experts recommend a gradual, SIP-based approach for long-horizon investors, emphasizing patience and discipline over short-term bets.
•Key considerations for increasing small-cap exposure include a 7-10 year investment horizon, diversified portfolio, comfort with drawdowns, and systematic investing.
