Neutral impactStocks
How to pick small-cap mutual funds and avoid chasing past returns
CNBC-TV18 1 hr ago·18 Oct 2026, 8:47 am
Small-cap mutual funds offer high growth potential but come with significant volatility. Their performance can swing dramatically depending on the market cycle, meaning past winners are not guaranteed future performers. Investors must look beyond a fund's recent returns to understand its true risk profile.
To make a smarter choice, focus on the fund manager's track record and investment philosophy. It is also crucial to check the portfolio's concentration, as putting too much money in a few stocks can increase risk. Additionally, pay attention to the fund's liquidity, which determines how easily you can buy or sell units without impacting the price.
Going forward, investors should compare the fund's performance against its benchmark index over a longer time horizon. This helps determine if the fund is adding value through skill or simply benefiting from a favorable market environment. Always ensure the fund aligns with your risk tolerance and investment goals.
Excerpt from CNBC-TV18
Published On Oct 18, 2026 | 14:17 IST Last Updated On Oct 18, 2026 | 14:17 IST Small-cap mutual fund performance can vary widely across market cycles, with past winners sometimes slipping down the rankings. Harshvardhan Roongta of Roongta Securities explains how investors can assess fund managers, portfolio…Read the original at CNBC-TV18
Key takeaways
- Category: Stocks.
Why it matters
A routine update. Use the price and stock snapshot to gauge how the market is responding.
