Small and midcaps facing valuation concerns and caution from SEBI. Investors advised to assess risk appetite and liquidity needs. Proper asset allocation crucial for managing risk. Long-term investors should stay invested despite current market conditions.
Sailesh Raj Bhan, CIO of Nippon AMC, which manages the largest small-cap fund with more than Rs 45,000 crore in assets spoke to Moneycontrol about the impact of Sebi advisory and his portfolio strategy
Funds having a high cash allocation may suggest a sense of caution towards the stock market. Generally, when funds hold a significant cash position, it implies that the market is overvalued or an anticipation of favourable investment opportunities in the future.
The Nifty Smallcap250 Quality 50 Index tracks the top 50 high-quality small-cap stocks in India, offering potential higher returns but comes with risks like volatility and lower liquidity, accessible through mutual funds or ETFs, requiring thorough investor research before investment.
Smallcap shares: The prevailing market seems to be characterised by a more positive sentiment, with a greater focus on the upside potential rather than downside risks. Valuations may appear expensive than historical average, Jain said.