Investment in equity category can be considered in multi-, mid- and small-cap funds
as they deliver better than index return in the long run," he added.
Cremers also found that "small-cap funds
tend to have higher Active Shares and better performance than large-cap funds, which suggests that small-cap managers have better stock picking opportunities in general."
Over the five-year period, 28% of large-cap funds, 24% of mid-cap funds and 30% of small-cap funds
in the bottom quartile disappeared.
New Delhi: Providing better returns to investors, majority of equity-linked saving schemes as well as mid- and small-cap funds
outperformed their respective benchmark stock indices over a five-year period ended December 2015, according to a report.
Mid-cap and small-cap funds
have done wonders to investors' portfolios.
sometimes face situations that require them to liquidate their holdings, for example when the market capitalization of a small firm increases so much that it is no longer suitable for inclusion in a "small cap" fund.
Hence, investors who can stomach market volatility and have an investment horizon of more than five years could consider investing in madcap and small-cap funds
Some small-cap funds
may stray into bigger companies, for example, or a conservative, value-oriented fund might start chasing some high-fliers.
These moneyspinners are not mid- and small-cap funds
that invest in little-known stocks and typically have low asset bases.
Through September of this year, S&P found that only 19 percent of large-company funds, 20 percent of mid-sized company funds and 27 percent of small-cap funds
held their top-half performance rankings over three-consecutive three-year periods.
The ChoicePlus Assuranceand American Legacy risk-managed fund lineups are made up of asset allocation options, as well as individual asset class options, including large, mid- and small-cap funds
, as well as domestic and international market exposure.