I'd like to gain some exposure to equities of small and really small firms. I reckon that my ability to cherry-pick these is basically nil given all the information asymmetries that probably exist. Could you suggest a way to gain such exposure, particularly via mutual funds?
- Chubbu

At Value Research, we classify funds according to four market cap categories: Large, Large & Mid, Mid & Small, and Multi Cap. As you can see, we do have a Mid- & Small-Cap category, but there are hardly any pure mid- or small-cap funds. According to our categorisation, there are 62 equity funds that fall in this category. Out of these, according to the April 2010 portfolios, there were only 8 funds that had more than 50 per cent of their equity portfolio in small-cap stocks. Sahara Star Value had 76 per cent of its portfolio in small caps while the corresponding figure for Magnum Emerging Businesses was 68 per cent. Moreover, each fund has its own way of defining what makes for a large-, mid- or small-cap stock.

Here we have listed some funds that currently hold at least 75 per cent of their portfolio in mid- and small-cap stocks. Do note that , this list is not exhaustive and neither are these funds all recommendations. You can get onto our website www.valueresearchonline.com for a more detailed look at the portfolio.

Schemes    Star Rating    3-yr ret (% p.a.)    Mid- & Small-caps (%)* Canara Robeco Emerging Equities   * *   4.87   100 Magnum Midcap   * *   -4.24   100 Religare Mid Cap   * * *   6   100 DSPBR Small and Mid Cap   * * * * *   13.31   98.04 HSBC Midcap Equity   * *   0.51   97.6 UTI Mid Cap   * * *   10.53   92.2 Birla Sun Life Mid Cap Plan A   * * * *   11.15   91.52 Magnum Emerging Businesses   * *   3.41   91.39 ING Midcap   * *   2.23   91.26 Taurus Discovery   *   -5.81   90.57 Reliance Long Term Equity   * * * *   9.59   90.47 L&T Midcap   * * *   9.11   88.39 Kotak Mid-Cap   * *   1.75   88.08 ICICI Prudential Emerging STAR   * *   1.08   87.9 IDFC Premier Equity Plan A   * * * * *   21.03   86.71 Sahara Mid-Cap Fund   * * *   11.63   86.37 Principal Pnb Long Term Equity 3Y   * *   -0.03   85.15 Sundaram BNP P Select Midcap   * * * *   12.53   82.39 Tata Midcap   * * *   5.49   78.17 Kotak Emerging Equity   *   0.64   - Rating as on June 30, 2010 & Returns as on July 26, 2010 / Portfolio details as on April 30, 2010 * Exposure to mid- and small-cap as a percentage of total portfolio