According to Girirajan Murugan, CEO of FundsIndia, the smallcap and microcap stocks in the Indian market are risky and overheated at the moment due to their sharp rise in prices. He advises investors to diversify their portfolios to reduce risk and take advantage of the current correction in the market. Murugan also mentions that the continuing rally in crude oil prices and the depreciation of the rupee against the USD could pose short-term challenges.
Investing in micro-cap stocks can offer potential rewards, but it also comes with several risks that investors should be aware of. Nirav Karkera, Head of Research at Fisdom, tells us about what the micro-cap valuations are hinting at and how funds can manage the risks in micro-cap funds. Listen in
Mutual funds’ search for higher returns has taken them deep into the micro-cap zone, backed by a rise in the inflows and prices of these stocks. But a micro-cap-focused fund should ideally not be your first investment. A measured and careful exposure is fine, though.