Advisers suggest a cut in mid-, small-cap exposures

While the Nifty 50 trades at a PE of 32, the Nifty Midcap 150 trades at a PE of 40.95. Over the last year, the Nifty 150 Midcap PE doubled from 21.62 to 40.95, while the Nifty Smallcap 50 PE has moved up from 14.98 to 82.79.

Synopsis

This comes amid fears of the second wave of Covid-19 hurting economic growth coupled with high valuations and a sharp run-up in equities over the past year.

MUMBAI: Portfolio advisers are pruning allocations to mid- and small-cap equity funds by around 5 per cent in investor portfolios. This comes amid fears of the second wave of Covid-19 hurting economic growth coupled with high valuations and a sharp run-up in equities over the past year. “Indian mid- and small-cap stocks have traded at lofty P/Es. Aggressive investors can reduce mid- and small-cap allocations by 4-5 per cent from their targeted

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