Small caps are always alluring to the investor. Everyone knows that it is difficult to make quick money in large well-known and well-researched stocks. We all want to find that small gem which turns a lakh of rupees into crores. The most money is made in such cases when we can spot a company that will turn out to be a market-leading name in five to ten years. Today, the investor population has increased dramatically. Besides, information is available to everyone. This makes small cap investing both interesting and risky.
SEBI’s new circular dictating a minimum mid-cap and small-cap stock allocation has left investors in multicap funds scratching their heads. But there’s another set of investors who are thrilled with this move. These are the folks who are already invested in smallcap stocks in their direct equity portfolios or owning smallcap equity funds.