For a long term horizon best to have 30% into Large cap, 50% into Mid cap and remaining 20% into small cap. Large Cap: 1st to 100th company in terms of full market capitalization b. Actually, Fama’s contributions to the Econ/Finance field were so substantial that he was one of the 2013 Economics Nobel Prize winners. Mid Cap : 101st to 250th company in terms of full market capitalization c. Small Cap: 251st company onwards in terms of full market capitalization Small-cap stocks are primed to outperform large caps over the next 10 years. The long-running outsized returns delivered by this market-cap segment have attracted considerable attention, and many wonder if it’s too late to add exposure to smaller stocks. Background: The value and small-cap factors 1926-2019. Small vs. Large Company Domestic Stock Portfolio Allocation When you want to diversify your portfolio, you must consider many different classes of investments. The most famous research comes compliments of Ken French and Eugene Fama. Mid caps also lag small caps when rates go down. Mid-caps, often referred to as "Goldilocks" stocks, offer a 1-2 punch of financial stability you don't get from small caps, but also greater growth potential than many large caps. Currently, it only owns 602 stocks, excluding many of the smallest, most illiquid companies in the space. Small-cap stocks are considered good investments due to their low valuations and potential to grow into big-cap stocks, but the definition of a small-cap … "If $10,000 were invested at these rates, at the end of 20 years in a large-cap fund you would have $63,700 versus $100,000 is a small-cap fund, or 57% more money." Additionally, the fund tracks the S&P Small-Cap 600 Index but cherry-picks its holdings. SEBI has defined Large Cap, Mid Cap and Small Cap as shown below: a. 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