How MFs navigate different market cap segments

How MFs navigate different market cap segments

Domestic mutual funds allocate across different market capitalisation segments to balance risk and return potential. Large-caps offer stability and consistent returns but modest growth, serving as portfolio anchors. Mid-caps provide a middle ground with reasonable stability and stronger growth prospects. Small-caps and micro-caps offer highest growth potential but with increased volatility and risk. Allocation decisions are driven by fund objectives, market conditions, economic outlook, and investor risk tolerance. Diversification across these segments helps optimise returns while managing overall portfolio volatility.

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Published on April 29, 2025

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