Size matters, when it comes to mid- and small-cap schemes. The larger the size of these schemes, the tougher it is for the fund manager to make investments in smaller-sized, but promising companies. This is because, for a meaningful allocation, a large-sized scheme would need to make large investments and this can sharply push up the stock prices of a smaller-sized company. So, the fund manager ends up paying more every time she purchases shares, what is known as impact cost. Selling shares can also have an impact cost from lack of buyers. That's why advisors prefer smaller mid- and small-cap schemes.