Nikhil Rungta, co-chief investment officer of equity at LIC Mutual Fund, believes contrary to popular perception, valuation is not a key challenge for large and small-cap segments. However, the mid-cap index trades significantly higher than its respective fair forward multiples, posing a major challenge for this segment. This stretched valuation is primarily due to about 15-20 per cent of the index constituents trading at very high multiples.
Popular mid-cap funds struggle to keep pace with runaway benchmark
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