New Delhi, Sept. 12 -- Small-cap funds can offer investors high long-term growth, but the process can be extremely volatile as compared with large-cap or diversified equity funds. So, if you are looking to add small-cap exposure, the question is not just which fund to choose, but how much small-cap exposure is enough for your portfolio.

"Small-cap schemes can play a constructive role as a growth sleeve within an equity portfolio, but they are highly volatile," said Arijit Sen, SEBI Registered Investment Adviser and Co-Founder, Merry Mind. He cautioned that sharp drawdowns are possible, making a longer investment horizon and careful position sizing important.

Sen further advised that one should consider small-cap exposure as a complement...