The froth in the small and midcap (SMID) space is limited to a few pockets, but regulatory scrutiny could lead to sustained volatility, observe India s top-drawer wealth managers.
They add that they have been advising clients to reduce their exposure to smallcaps.
Anand Rathi Wealth, which manages investor wealth through mutual funds (MFs), reports that its exposure to smallcap stocks, both through MFs and directly, has decreased by nearly 7 percentage points in the past few months, now standing at 23 per cent.
With interest rates at peak and most likely to head lower from here, REITs are expected to do better. Experts say the quality and diversification of assets, the profile of the rental occupiers and the developer portfolio are key points to watch out for before investing in Indian REITs.
Jayesh Faria says: There is no right or one fit for all answers to asset allocation queries but people want some guidance hence the unique formula of 100 minus your age should be equity allocation works well for majority of people. The investor in the age bracket of 30-40 years has long working years ahead of them and can sustain volatility hence their equity allocation should be highest."