Only investors with a long horizon should enter mid- and small-cap segment

After the outperformance of the past three years, they should be prepared for modest returns in the near term

Sanjay Kumar Singh & Karthik Jerome | New Delhi
Last Updated at February 24, 2023 19:45 IST

The S&P BSE MidCap index and the S&P BSE Smallcap Index are down -4.3 per cent and -4.5 per cent, respectively, over the past three months. The Sensex, the large-cap index, has declined less (it has given a return of -3.3 per cent over the same period). While most analysts expect the mid- and small-cap segment to underperform in the near term, some have gone so far as to recommend a complete pullout , based on the premise that these stocks tend to underperform during times when the Reserve Bank of India (RBI) is withdrawing liquidity.

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