Invest Smart: How to manage investments in smallcap and midcap funds

The Nifty and the Sensex have been on a dream run, scaling new peaks time and time again. Amidst this, it is smallcap and midcaps space which has been on roll. There are many who are now wondering what to make of this market rally and whether there is still an opportunity to invest into smallcap funds or midcap funds.

Feroze Azeez, Deputy CEO of Anand Rathi Wealth Management believes that this rally was long overdue and that the current valuations are fair.

Specifically on smallcaps, he says that smallcaps are still extremely attractive with a good potential upside. However, he cautions, with the smallcap universe being so large, it is very importat to choose the right fundhouse and the right fund. He also warns, that while there is an upside, investors who do invest in the space should be ready to take a short term 10%-15% mark down.

Strategy to invest in a rising market:
* Stick to your asset allocaton
* Continue your SIPs
* Hold on to your current investments
* Rebalance your portfolio in light of the run up in equities
* Lumpsums can be invested in 3-4 tranches