Mumbai, Oct. 30 -- Some of India's leading wealth managers looking beyond the country's bustling markets for global diversification are zeroing in on US smallcap and midcap stocks, expecting these to deliver better returns than their overheated domestic counterparts.

While US small and medium enterprises have posted muted earnings in recent years because of high inflation, supply chain disruptions, and elevated interest rates, a number of factors now favour them.

The US Federal Reserve's decision to lower interest rates, cooling inflation, and stabilising wage growth favour SMEs as these companies react quickly to credit costs and economic momentum, said Vinay Jaising, chief investment officer and head of equity advisory at ASK Private ...