ETMarkets Fund Manager Talk: Why this asset manager doesn’t see a “doom and gloom” situation for mid & smallcaps?

economictimes.indiatimes.com:

While the recent stress tests by asset management companies on midcap and smallcap funds doesn’t necessarily spell a “doom and gloom” situation for the entire segment, it necessitates a relook at the allocation and diversification by investors, says Sonam Srivastava, smallcase manager & Founder of Wright Research.
Srivastava believes that any potential correction in this segment could offer a chance to buy well-positioned companies at a discount.
“While near-term volatility remains a possibility, the long-term outlook for smallcaps appears promising. The valuation levels for some smallcaps do warrant caution and the volatility before elections was expected,” she said in an interview with ETMarkets. Edited excerpts:

What’s the fate of mid- and smallcap stocks after the recent stress test results released by AMCs?
Sonam Srivastava: The recent stress test results by AMCs spotlight potential vulnerabilities within specific mid- and smallcap companies. This doesn't necessarily spell doom and gloom for the entire segment, but it does necessitate a relook at our allocation and diversification.

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