Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating


Small-Cap Index Up 73%, Mid-Cap 54%. Where Should Your Money Go?

Author: Administrator Account/Tuesday, February 23, 2010/Categories: Stocks

Small-Cap Index Up 73%, Mid-Cap 54%. Where Should Your Money Go?

The runaway speed at which Indian stock markets have gone up this year has taken everyone by surprise. And the numbers speak themselves! Consider this. The S&P BSE Mid-cap Index has gone up by 54% while the S&P BSE Small-cap Index has soared by a whopping 73% (year-to-date as on Dec 8). Compare this with the rise in S&P BSE Sensex that rose by 32%, a modest run compared with its mid-cap and small0cap peers.

So should you switch to mid-caps and small-caps now? Before you decide to bet on mid-caps and small-caps, be sure about the risks involved. Here’re 5 factors you need to watch out before investing in these stocks or mutual funds.

(1) Historical data suggest that when equity markets surge, mid and small cap indices outperform their underlying large cap benchmarks.

(2) The opposite is also true, i.e. in times of market meltdown, mid and small caps fall more sharply than their large cap indices.

(3) Markets are surrounded by lot of optimism. The key factors driving the markets are the positivity built around the Modi-led government and a strong hope for reforms. However, what remains to be seen now is how effectively the policy decisions are taken which will keep the momentum and investor sentiment upbeat.

(4) If you’re planning to invest in a mid-cap or a small0-cap fund, apart from returns you should also look at the composition of the schemes. Be aware of how the scheme is being managed, its portfolio composition and whether or not it is in sync with your investment idea.

(5) The strategy should be to be well spread across market capitalizations while slowly increasing the exposure towards mid and small caps.

Print Rate this article:
No rating

Number of views (132)/Comments (0)

Administrator Account

Administrator Account

Other posts by Administrator Account
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.