Wealth Multiplier Small Cap Mutual Funds:What could be better than this if investors’ money increases from 4 times to 7 times in just 5 years? Top 10 small cap mutual funds have done this wonders. The return figures of these small cap schemes show that their fund managers have been very successful in making their investors rich in the last 5 years. We will tell you about these 10 schemes further, but before that let us get more information about the features of small cap funds.
of small cap mutual funds Definition
According to SEBI definition, it is necessary for any small cap mutual fund to invest at least 65% of its total assets in small cap companies. These companies are usually outside the top 250 companies on the basis of market capitalization and their market value is less than Rs 100 crore.
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Features of small cap mutual funds
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High Growth Potential: Small cap companies are in the early stages of their development, which gives them the potential to grow rapidly.
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Risk and Volatility: Investing in these companies is more risky because they depend more on market conditions.
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Impact on bull and bear markets: These funds can perform better than mid and large cap funds during a bull market, whereas their performance can be weak during a bear market.
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10 schemes giving 4 to 7 times returns in 5 years
|
Name of Fund (Direct Plan) |
Annual Return (CAGR) |
Value of Rs 1 lakh in 5 years |
|
Quant Small Cap Fund |
47.82% |
Rs 7,05,690 |
|
Bank of India Small Cap Fund |
39.62% |
Rs 5,31,508 |
|
Nippon India Small Cap Fund |
37.03% |
Rs 4,84,032 |
|
Canara Robeco Small Cap Fund |
36.07% |
Rs 4,67,328 |
|
Edelweiss Small Cap Fund |
35.12% |
Rs 4,51,079 |
|
Tata Small Cap Fund |
34.45% |
Rs 4,40,012 |
|
Invesco India Small Cap Fund |
34.03% |
Rs 4,33,272 |
|
Kotak Small Cap Fund |
32.67% |
Rs 4,11,623 |
|
HSBC Small Cap Fund |
32.57% |
Rs 4,09,811 |
|
DSP Small Cap Fund |
32.05% |
Rs 4,02,096 |
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Why Invest in Small Cap Funds?
Small cap funds invest in those companies which are in their initial stages and their business has the potential for considerable growth and diversification in the future. Shares of small business also many times Are undervalued.As these companies grow, their valuations improve. Therefore,investing in themInvestors can get high returns in the long term. Apart from this, small cap companies are sometimes acquired by big groups. Even if this happens, their share prices may increase.
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Pay attention to these things before investing
Small cap funds have high return potential but also high risk. Therefore, before investing it is important to understand your financial position and risk appetite. Before investing in any fund, one should get information about its performance history, investment strategy and past record of the portfolio manager. Apart from this, one should always take a long term view while investing in small cap funds, because these funds can give better returns in the long run. Therefore, investors who are willing to take more risk and want to invest with a long-term perspective can consider including small cap funds in their portfolio. However, the share of small caps in the portfolio should not be more than 10-15 percent. Also, while looking at the past data of returns of small cap funds, keep in mind that there is no guarantee that the past performance will be repeated in the future.
(Disclaimer: The purpose of this article is only to provide information and not to give advice on investing in any fund. Take investment decisions only after taking the advice of your investment advisor.)
