Mumbai, Nov. 6 -- Carnelian Mutual Fund is the latest entrant in India's Rs.82-trillion mutual fund industry. The fund house has launched a small-cap fund as its maiden equity offering, at a time when the segment has seen volatility amid valuation concerns, global uncertainty and crude oil prices.

Vikas Khemani, founder and chief investment officer at Carnelian Asset Management and Advisors, explains why he remains bullish on the market and small-caps, while cautioning investors against overlooking their risk-taking capacity when allocating to the segment.

Edited excerpts:

We recently received approval from the Securities and Exchange Board of India (Sebi) and launched our small-cap fund. Carnelian began with portfolio management servi...