Small-Cap Funds Limit Microcap Exposure to 2%

Small-cap funds in India mostly invest in larger small-cap stocks, with only about 2% going to the smallest companies, called microcaps.

These funds have around ₹3.7 lakh crore invested across 32 schemes.

Most of the money is put into the top 750 stocks, with a big focus on the core small-cap segment.

Some money is also kept in larger companies, cash, and debt for safety.

Small-cap stocks have grown a lot in the past five years, especially those ranked lower.

Investors are putting more money into small-cap funds even when they lose value in the short term, showing they believe in long-term growth.

Some well-known companies are actually small-caps, even though people might think they are bigger.

This shows that small-cap funds are important for accessing unique sectors and creating long-term value.