Mid- and small-caps continue to give positive returns despite sharp fall

If you have stayed invested for over a year, things are likely to be jittery till June-end when the mutual fund industry's reclassification exercise is completed

It has been turbulent times for mid- and small-cap stocks. With the Nifty Mid-cap 100 and Nifty Small-cap 100 slipping as much as 11 per cent and 16.1 per cent since the beginning of 2018, there is palpable fear among many investors about the prospects of their holdings in such stocks and mutual fund schemes.

These sharp falls have been for several reasons. For one, the valuations of many of these stocks have risen very sharply. For example, stocks like Indian Hotels, JSW Energy, Indiabulls Ventures and some others are trading at a price-to-earnings ratio (P/E) of over 100x (trailing 12