Small-cap funds can be rewarding for those who can stomach volatility

Limit investments in this space to 10-15% of your corpus, though; pay attention to fund size

The stock market has shown considerable strength in recent weeks, with the indices moving up swiftly. Year-to-date, however, small-cap funds have remained flat (0.9 per cent). Over longer periods of three, five and 10 years, however, small-cap funds have rewarded their investors handsomely. After the recent bout of volatility (between October 2021 and June 2022), one question on investors’ minds today is whether this is a good time to enter small-cap funds.

“Small-cap funds are always a good investment for long-term investors who have the patience to live through the volatility associated with equity markets in general and small-caps in