Consultant mentioned his firm was overweight in Large Caps and underweight in small caps in thismarket, why?

Question

Consultant mentioned his firm was overweight in Large Caps and underweight in small caps in thismarket, why?

Answer 1

Thats because large caps are less riskier and cheaper than small caps now. So you overweight them in your portfolio. Small caps are very risky anytime and are riskier in this market condition since they will not be able to weather bad economic situations like large caps do. So you underweight them. Hope this helps.

Answer 2

Large caps normally have a smaller beta so will move up and down less than the market. Probably a good thing in a down market, not so good in an up market. Maybe they're becoming defensive.