From a portfolio construction point of view, HDFC AMC ensures that hidden gems do not dominate the entire fund, which can increase risk. Instead, it balances them with established leaders to provide a cushion during market volatility. This barbell approach—where stable compounders support the portfolio while emerging ideas generate alpha—has worked well over long timeframes. It also aligns with investor expectations of risk-adjusted returns, especially in a country like India where small-cap and mid-cap investing can be volatile in the short term. It is also important to note that identifying hidden gems requires patience. These stocks may underperform in the short term, face liquidity challenges, or undergo periods of high volatility. However, HDFC AMC’s long-term orientation allows it to hold onto such companies, even when the broader market loses interest. This patient capital, coupled with a rigorous sell discipline, ensures that only the most promising ideas are retained. The exit strategy typically involves selling when valuations become stretched, or when the fundamental story changes significantly, rather than reacting to market noise.