Why do investors believe that small-cap, and mid-cap are good bets for the future?
small-cap stocks reflects India's strong corporate earnings. Despite uncertain macroeconomic conditions, a selective investment strategy in areas of strong earnings resilience is recommended for medium-term investors.
“We think that the growing interest among investors in mid and small-cap stocks reflects the broad-based strength of India's corporate earnings in recent years. Looking ahead, although short-term macroeconomic conditions may be uncertain due to factors like upcoming national elections and global yield-related volatility, we believe that adopting a selective investment strategy in mid and small-cap stocks, with a focus on areas of strong earnings resilience, is the prudent approach for medium-term investors," said Trideep Bhattacharya, CIO-Equities, Edelweiss MF.
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Investors believe that small-cap, mid-cap, and thematic funds are a good bet for the future due to the growing investor base, increasing market share and revenue, and potential for capacity expansion in small companies. “In terms of market share and revenue, mid and small-cap space have a low base and are growing at a faster rate than large-cap companies which have a high base.
Government and private cap ex-are picking space and small companies have the potential to increase the capacity by 2x or 3x at a much faster pace than any larger company because they have a very large base. To summarize, the investor base of these undertakings is growing in line with capacity expansion and a low shareholder base favoring them," said Mukesh Kochar, National Head of
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