BEST Small cap Mutual fund Scheme, Advantages & How to invest?
“Small-cap mutual fund is a gateway to hazardous and quick rich goal.”
Hello investors,
As you are reading the above statement, some of you may be feeling this true, but some of you may not have an idea about the small caps happenings in the backstage.
You must be pondering “is small-cap mutual fund a good investment” Or which are the best small-cap mutual fund in India to invest in 2024, right?
Stay tuned for this article to know about best small-cap mutual fund schemes details.
I am elated to share my knowledge of small-cap mutual funds with you.
Let’s get started!
This article will take you to acquire knowledge regarding-
- What is small-cap?
- Why small cap is needed?
- Best small cap funds and details
- Advantages of small cap
- Best ways to invest in small cap funds
- Best Mutual Fund Investment App
After going through the above details, you’ll come to know a basic but important understanding regarding the small caps. You will learn the risks and advantages associated with the small caps. This is very crucial also because generally small caps are sensitive to handle and operate to acquire handsome returns. It needs a smart strategy.
So, for what to wait long… let’s begin with the basics.
What is Small Cap Mutual fund?
You know well that economy has categorized companies according to their size of capital investment. There have been three categorizations as the large-cap, mid-cap, and the small cap.
Here, we will talk about the small cap only.
Small cap is the lowest capitalized company model where market capitalization is less than or equal to Rs 2 crore.
These small-sized companies are either startups or going through their developing stage.
The small-cap companies have a lower customer base, means they have less number of clients as compared to mid-caps and large caps. As the risk associated with these sizes, the company seems to be lower because it has low capital investment in the market and low customer base. But, it creates a high risk at the same time, when these small caps attempt to invest in risk-oriented securities like equities in the market.
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So, it is really necessary to understand where to invest and how to invest via small caps.
Let us first explore the fund names, where you can make investments.
Given below are the names of the best small cap mutual funds to invest in 2024!
- HDFC Small Cap Fund Direct (G)
- SBI-Small Cap Fund-D (G)
- L&T Emerging Business-DP (G)
- Kotak Small Cap Fund – D (G)
- Franklin (I) Smaller Cos Direct (G)
- Reliance Small Cap – Direct (G)
Now let us check the returns of each fund in 1 year or in the last 5 years. It will help you to make a comparison between each fund as per their performances.
You can check the fund’s performance by observing their-
- Crisil Rank
- AUM in control
- Return percentage in 1 year, 3 years, and 5 years.
- Difference Direct Vs Regular Plan
- SIP Or Lumsum Which is Best?
- How to select mutual funds for investment?
Top Small cap Funds details
- HDFC Small Cap Fund (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) |
| 1 | 41.837 | 2,018.21 | -0.1 | 17.1 | 21.1 |
The Crisil has placed this fund at position 1 which in the last quarter was at the 3rd position.
As far as its performance is concerned then it is performing well as compared to its peers. It has provided a good return in the fifth year which was 21.1. %.
The minimum investment you would need in this plan is Rs5000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
If you are already invested in this scheme, you may continue to stay invested. But, do keep a check on its performance.
2. Kotak Small Cap Fund – D (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) |
| 3 | 71.964 | 48.46 | -14.8 | 9.8 | 21.1 |
The Crisil has given it number 3 position considering its performance of the last 3 years as it has provided an annualized return of 3 years of 9.8%. Also, it is performing very well as compared to its peers.
You can buy units at the NAV 71.964
The fund is controlling an AUM of Rs 48.46 Crore.
The minimum investment you would need in this plan is Rs5000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
If you are already invested in this scheme, you may continue to stay invested. But, do keep a check on its performance.
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3.SBI Small Cap mutual fund- D (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) |
| 2 | 52.847 | 177.13 | -8.7 | 17.1 | 23.6 |
It is an open-ended fund where you can buy and sell funds in the market anytime. The Crisil has promoted a rank up this year to this fund due to its good performance in the market. It has provided an annualized return of 3 years at 17.1 % which is quite good.
The minimum investment you would need in this plan is Rs5000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
If you are already invested in this scheme, you may continue to stay invested.
4. Franklin (I) Smaller Cos Direct (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) |
| 3 | 54.056 | 1,472.67 | -15.8 | 10.0 | – |
As per the performance, it has provided annualized returns of the last 3 years at 15.8%.
It has an AUM of Rs 1,472.67 Crore.
You can purchase the units at NAV. 54.056
The minimum investment you would need in this plan is Rs5000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
If you are already invested in this scheme, you may continue to stay invested.
5. L&T Emerging Business Fund-RP (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) |
| 2 | 24.345 | 3,257.18
| -9.1 | 18.3 | – |
In the first year, it generated the return at -9.1 while it provided an annualized return of last 3 years at 18.3%.
Although the fund performance is good, and the Crisil has ranked it at 3rd position so, you can stay invested in this but keep a check on its performance.
The AUM it is controlling is 3,257.18
The minimum investment you would need in this plan is Rs5000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
6.Reliance Small Cap – Direct (G)
| Crisil Rank | NAV (in Rs) | AUM(in crore) | 1-year return (in %) | 3 years return (in %) | 5 years return (in %) | |
| 3 | 40.849 |
| -13.0 | -13.7 | 29.1 |
The units of this fund can be purchased at NAV 40.849
It is controlling the value of the assets under it valuing RS1,001.82
In the first year, it generated a return at -13.0 % and in the last 3 years it generates a return at 29.1
The minimum investment you would need in this plan is Rs10000. In case of SIP, initially you have to pay Rs5000 regularly, but after that, you can continue with Rs1000.
There is no entry load, but you have to pay 1% in case you redeem or switched-out your amount before 365 days.
The Advantage of investing in Small caps Mutual Fund
Are small-cap mutual funds a good investment? Let’s find out?
- Small cap companies are more focused on new ideas to grow rapidly in the market. They have more stimuli to gain the major stakeholders in the market, so they perform better in the market, thus delivering good returns to the customers.
- Small cap companies are more focused and they tend to operate efficiently which helps them to expand their business and generate attractive offers for investments to their customers.
Why should you do investments in Small Caps Mutual Funds?
Small caps are highly volatile due to its less market capitalization but it has more chances to grow the customer’s investment rapidly in lesser time.
Small caps funds are invested in those companies where they have potential to grow.
You can diversify your portfolio by investing your 15 to 20% money in small caps so that risk volatility can be minimized.
How to Invest in Smallcap Funds?
Best ways to invest in Smallcap Fund-
You should do investments in small caps after careful study of all funds in the market as per your needs. You should check the fund’s performance in the last years, its rank and returns coverage.
You should invest in only those companies which have the potential to grow in the future.
You can take small-cap investment via SIP where you can do investments regularly by little money.
If you have a time horizon of at least 5 years, then you should definitely invest in small caps.
Always try to invest in open-ended funds so that you can enjoy the taste of liquidity.
Final Thoughts
An investment in knowledge pays the best interest!
Dear readers! I am elated to share my knowledge on small-cap mutual funds with you. I hope your query pertaining to why invest in small-cap mutual funds is sorted now.
Small caps are generally most prone to the market risks but you have to maintain your faith on these caps if you want your rapid growth in lesser time. You should have the good risk appetite to bear the loss in case the small-cap fund would not be able to generate returns or become bad-debt.
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