The Nifty 50 index saw an impressive 11% surge from December to March, but small-cap stocks lagged behind with a median return of only 3.8%. Concerns over small and mid-cap valuations, regulatory worries, and increased Foreign Institutional Investor (FII) flows favoring large caps may have contributed to this disconnect. Motilal Oswal recommends various investment options based on holding period, including equity mid & small-cap strategies for long-term growth, balance advantage funds for medium-term balance, and equity saving funds for short-term liquidity.