Mutual Fund: Risks of Investing in Small Cap Companies

Mutual Fund: On 15th March, there was a decline in the Indian share market. Nifty 50 fell by 130 points to 22,023 and Celsax fell by 453 points to 12,643. Many reasons are being considered behind the decline. One of the major reasons is the result of the stress test of mutual funds. Let us know what is stress test and how it affects share market. 

What is Stress Test

The decision was taken in the discussion between Securities and Exchange Board of India (SEBI) and Association of Mutual Funds. The presentation of mid and small cap funds was quite good for some time due to which the retained investors were investing more money in large cap funds than they were in mid and small cap.