In a letter to AMFI, Sebi said in the context of froth building up in small and midcap segments of the market and the continuing flows in the small and midcap schemes of mutual funds, trustees, in consultation with Unitholder Protection Committees of AMCs, shall ensure that a policy is put in place to protect the interest of all investors.
Siddharth Srivastava, ETF Products & Fund Manager at Mirae Asset Investment Managers (India), advises caution in microcap and smallcap categories due to high valuations. He expects market consolidation until earnings justify current valuations. "From an investment horizon point of view, we believe that whosoever is investing in smallcaps, be it BR fund or any other fund, he or she should now look at at least a four to six-year horizon. "
Divam Sharma of Green Portfolio, PMS, suggests caution due to expensive markets and high volatility. Talks about a tug-of-war between FIIs and DIIs and Fed rate cut expectations.