Dilemma for investors as large-caps pip smaller stocks in August

Over the past month, mid-cap and small-cap funds have given average returns of 4.9% and 3.5%, respectively

Returns of small- and mid-cap-oriented schemes fell below those of large-caps for the first time this year, in August. This may prompt investors to further reallocate funds to large-cap schemes. 

Given the divergent market performance and lofty valuations across the board, investors appear to be torn between large-cap and smaller-cap schemes. Some experts are of the view that the correction in the broader market can be used as a buying opportunity by investors having a high-risk appetite. There is an opportunity to generate alphas in the small- and mid-cap category from a long-term perspective, they add.

Over the past month, mid-cap and