Reduce liquidity risk in smallcap, midcap funds with asset allocation
Last Update Date: 06-10-2026
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar suggested rebalancing regularly so small and midcap holdings stay within set limits. He also said money for a goal one or two years away should be moved from equity funds into debt instruments.
More of Abhishek's views on mutual funds
Stress tests by fund houses show that smallcap funds take longer than midcap funds to sell down part of their portfolios. The article discusses gaps in the test method, whether liquidity should shape fund choice, and why asset allocation and a long horizon are the main ways for investors to manage this risk.
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Reduce liquidity risk in smallcap, midcap funds with asset allocation