Exit small, midcap funds if risk appetite low and time horizon short
Last Update Date: 06-10-2026
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar explained that smallcap funds hold more stocks outside the 500 largest companies, and these have rallied sharply. He suggested keeping enough in fixed income near a goal, and only money that can stay invested for five to ten years in these funds.
More of Abhishek's views on mutual funds
After a sharp rally in midcap and smallcap indices and heavy inflows into these funds, the article lists the key risks: rich valuations, liquidity and impact costs, long portfolio tails and investor behaviour. It suggests that those with low risk appetite or short horizons exit, while others rebalance.
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Exit small, midcap funds if risk appetite low and time horizon short