Ace investor Porinju Veliyath, MD, Equity Intelligence India, said it was safe to selectively pick midcap and smallcap stocks, as some of these stocks offered high margins of safety compared to blue chip stocks.

According to him, some structural changes in the economy could also be leading to pain in the market.

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"The legal system in India is very poor. This is the biggest challenge when investing in small and midcaps and that is why one has to be very smart and extra effort is required to identify companies," he said.

Going forward 12-months down the line the midcaps will outperform large caps, he added.

Talking about investor behaviour from the PMS community, he said there is absolutely no redemption pressure.

First Published:Jul 19, 2018 4:35 PM IST