Smallcap stocks have been the favourites of the market for four years now. Mutual funds focused on this segment have, however, turned cautious. The proportion of their portfolios invested in smallcap stocks has come down sharply over the past few months. Midcap-oriented mutual funds that held a portion of their portfolios in smallcap stocks have also done the same.
Usually stocks with a market capitalisation of less than Rs 3,000 crore are classified as smallcap stocks.
