Largecap mutual funds have struggled so far this year, with average returns declining 2.36% on a year-to-date (YTD) basis. In contrast, midcap and smallcap funds have delivered average gains of 8.47% and 15.32%, respectively, according to an analysis by ETMutualFunds.
The sharp divergence in performance of market cap based categories raises an important question for investors: should they continue backing the market’s recent winners or use the correction in large caps as an opportunity to rebalance their portfolios?
