The 30% smallcap tilt: How Abakkus Flexi Cap Fund is positioning for the next rally

Abakkus Flexi Cap Fund manager is constructive on markets despite near-term risks, noting Q4 FY26 earnings surprised positively in small and mid caps with 15-20% growth versus single-digit Nifty earnings growth. The fund maintains about 30% allocation to small caps and 50% to SMID stocks, citing selective mispricing and better risk-reward in quality small caps. Q1 FY27 faces risks from West Asia crisis lag, weaker monsoon, and rural demand, but FY27 overall earnings risk appears contained, with the fund bullish on financials, pharma, discretionary consumption, and manufacturing over a five-year horizon.