Small-Mid cap bets of 2017 turn negative in February 2018

In 2017 small and mid-cap funds have given stellar returns. Out of the top 10 wealth creator funds of 2017, four funds are from the small and mid-cap category which pocketed almost 55 to 60 per cent returns to its investors. But in the last one month these small cap and mid cap funds seemed to be the funds with the worst returns.

As per our data analysis all the schemes from the category of Small-Cap and Mid-cap have given negative returns in the past one month. On the aggregate level, Mid-cap category and Small-Cap category have given negative returns of 5.5 per cent and 6.2 per cent respectively in the past one month ending on February 12, 2018. For the same period, the S&P BSE Mid-Cap and S&P BSE Small-Cap have reported negative returns of the 7 per cent and 11 per cent, respectively.

The worst hit among the Mid-cap category was Motilal Oswal MOSt Focused Midcap 30 Fund - Direct Plan with almost 10 per cent negative returns for the month. On the other side, in the small cap category the DSP BlackRock Micro Cap Fund - Direct Plan gave negative return of 8 per cent nearly.

Many market experts have stated that this fall was mainly due to the stretched valuations of Small-cap and Mid-cap stocks. So considering the current market situation investors should rebalance their fund portfolio and should look into their portfolio concentration.

If an investor is investing in the Small-cap and Mid-cap funds by looking and evaluating their past performance, then they must be aware of the current market situation. The bond yields and other macroeconomic factors suggest that it is very difficult to get same kind of returns from these schemes in the upcoming years, so investor should realign their investment as per their prime objective and goal behind the allocated asset, accordingly. Going ahead, if an investor intends to invest into the small-cap or mid-cap funds then he should invest with long time horizon and calculated exposure.