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Small-cap mutual funds drop up to 5% in three months: opportunity or warning?
India’s small-cap MF category fell as much as 5% in three months; some experts see a buying window, others urge focus on balance-sheet strength.
Small-cap mutual funds in India have fallen up to 5% over the past three months, with an average decline of 1.42%, according to recent analysis. Most of the impact was driven by external factors and risk-off sentiment, while valuations in the small-cap space are now described as ‘relatively fair’. Experts argue that these dips may represent a buying opportunity for long-term investors, but caution that quality, liquidity and strong balance-sheets matter more than broad market momentum at this stage.