Index confusion

Trying to find index that represents small and microcap stocks.

could be an index from NSE or BSE.

here’s the confusion-
NSE has smallcap 250, full smallcap 100 and free float small cap.

can someone please guide as to which index correctly represents Small and micro cap stock performance?

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small caps are companies with market cap of usually less than 500 Cr.

I wouldn’t worry about micro caps . since they’re generally very very risky. They need to grow in to small caps or midcaps to get any attention from investors.

Infact i would suggest you look into midcaps , since they offer the best balance between growth(Return) and risk.

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thanks @trader_dude for your reply.

agree with most of what you’ve said.

the reason for looking at small cap and microcap is the data presented here -

given this stellar return, i’d like to allocate a portion of portfolio to the same.

And hence the question.


Don’t be fooled by that return. That is the historical return. What that means is , if markets go down you can be down 4000% also. This is why i said Micro caps are very risky.
Will you be able to tolerate such loses ?

I suggest you look at risk and study risks more than returns.

Learn to minimize risks while maximizing returns. That should be your goal in investing. Not looking at the maximum returns. That’s how you lose money.

Best to balance your portfolio with Large caps/Midcaps and to some extent small caps. But not Micro Caps.

How to balance? , that requires some study/analysis and your risk appetite and expected returns.

the max you can be down is 100% …but got what you meant.

agreed, when it comes to investing many factors come into play and varies on risk appetite.

alright. thanks.