Small-cap mutual funds are those that invest primarily in companies with a small market capitalization. These funds can offer higher potential returns but come with a higher level of risk. In this blog, we’ll discuss some of the best-performing small-cap mutual funds in India.
- SBI Small Cap Fund SBI Small Cap Fund is one of the best-performing small-cap mutual funds in India. It has consistently delivered high returns over the past few years. The fund invests in companies with a market capitalization of up to Rs. 5,000 crores. The fund’s top holdings include companies like Supreme Industries, Relaxo Footwears, and City Union Bank. The fund has generated an average annual return of 23.78% over the past five years.
- HDFC Small Cap Fund HDFC Small Cap Fund is another top-performing small-cap mutual fund in India. The fund primarily invests in small-cap companies with strong growth potential. The fund’s top holdings include companies like Dixon Technologies, Mphasis, and Polycab India. The fund has generated an average annual return of 23.39% over the past five years.
- Nippon India Small Cap Fund Nippon India Small Cap Fund is a high-risk, high-reward mutual fund that invests in small-cap companies with strong growth potential. The fund’s top holdings include companies like Navin Fluorine International, City Union Bank, and Amber Enterprises. The fund has generated an average annual return of 20.68% over the past five years.
- Axis Small Cap Fund Axis Small Cap Fund is a relatively new entrant in the small-cap mutual fund space, but it has already established a strong track record. The fund primarily invests in companies with a market capitalization of up to Rs. 5,000 crores. The fund’s top holdings include companies like Alkyl Amines Chemicals, Sheela Foam, and Dixon Technologies. The fund has generated an average annual return of 20.38% over the past five years.
- Kotak Small Cap Fund Kotak Small Cap Fund is a high-risk, high-reward mutual fund that invests primarily in small-cap companies with strong growth potential. The fund’s top holdings include companies like Navin Fluorine International, L&T Technology Services, and SRF. The fund has generated an average annual return of 20.28% over the past five years.
Small-cap mutual funds are known to offer high potential returns to investors, but they also come with a higher level of risk due to the volatile nature of the small-cap stocks. These funds primarily invest in small-cap companies that have a market capitalization of up to Rs. 5,000 crores, and therefore, have a higher growth potential.
Investing in small-cap mutual funds is recommended for investors with a high-risk appetite who are looking for long-term investments. The best-performing small-cap mutual funds have a strong track record of delivering consistent returns over the years. Here are some additional small-cap mutual funds that have been performing well in the Indian market:
- DSP Small Cap Fund DSP Small Cap Fund is a well-diversified small-cap mutual fund that invests in companies across various sectors. The fund’s top holdings include companies like Atul, Navin Fluorine International, and Honeywell Automation India. The fund has generated an average annual return of 20.29% over the past five years.
- Franklin India Smaller Companies Fund Franklin India Smaller Companies Fund is a well-managed small-cap mutual fund that invests in high-growth companies. The fund’s top holdings include companies like Tata Elxsi, Mahindra CIE Automotive, and Persistent Systems. The fund has generated an average annual return of 20.22% over the past five years.
- Aditya Birla Sun Life Small Cap Fund Aditya Birla Sun Life Small Cap Fund is a high-risk, high-reward mutual fund that invests in small-cap companies with strong growth potential. The fund’s top holdings include companies like Navin Fluorine International, Relaxo Footwears, and V-Guard Industries. The fund has generated an average annual return of 19.99% over the past five years.
- Invesco India Smallcap Fund Invesco India Smallcap Fund is a well-diversified small-cap mutual fund that invests in high-growth companies across various sectors. The fund’s top holdings include companies like KNR Constructions, Astral Poly Technik, and Dixon Technologies. The fund has generated an average annual return of 19.73% over the past five years.
- IDFC Sterling Value Fund IDFC Sterling Value Fund is a value-oriented small-cap mutual fund that invests in undervalued small-cap stocks. The fund’s top holdings include companies like ITC, Vodafone Idea, and HCL Technologies. The fund has generated an average annual return of 19.31% over the past five years.
Conclusion
In conclusion, small-cap mutual funds can offer high potential returns to investors, but they also come with a higher level of risk. It’s important to do your research before investing in any mutual fund, especially in small-cap funds. Always consult a financial advisor before making any investment decisions. The above-listed funds are some of the best-performing small-cap mutual funds in India, but past performance is not a guarantee of future results.
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Frequently Asked Questions (FAQs)
What is a mutual fund?
A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to invest in a portfolio of stocks, bonds, or other assets.
How do mutual funds work?
Mutual funds collect money from multiple investors and use it to buy a portfolio of securities. Investors own a portion of the portfolio proportional to their investment amount.
What are the types of mutual funds?
Mutual funds can be categorized into equity funds, debt funds, hybrid funds, index funds, sectoral funds, and more.
What is the minimum investment required for mutual funds?
The minimum investment required for mutual funds varies from fund to fund. It can be as low as Rs. 500 to Rs. 5,000.
What is NAV?
NAV (Net Asset Value) is the value of one unit of a mutual fund. It is calculated by dividing the total value of the mutual fund’s assets by the number of units outstanding.
What is expense ratio?
Expense ratio is the annual fee charged by a mutual fund to manage the fund. It includes the fund manager’s salary, administrative expenses, marketing expenses, and more.
What is the difference between growth and dividend options?
In growth option, the returns are reinvested in the fund, whereas in dividend option, the returns are paid out to investors as dividends.
What is the lock-in period for mutual funds?
The lock-in period for mutual funds depends on the type of fund. For example, ELSS (Equity Linked Savings Scheme) has a lock-in period of three years, while liquid funds have no lock-in period.
How to select a mutual fund?
Investors should consider factors such as the fund’s past performance, expense ratio, fund manager’s track record, investment objective, and more while selecting a mutual fund.
Is investing in mutual funds safe?
Investing in mutual funds comes with risks, but investing in a diversified portfolio of mutual funds can help reduce risk. Past performance is not a guarantee of future results, and investors should always consult a financial advisor before making any investment decisions.
