SBI Small Cap Fund gives huge returns since inception: SBI Mutual Fund’s scheme SBI Small Cap Fund has given great returns to its investors since its launch. This scheme has proved to be an attractive option for those investors who are looking for high returns in the long term by investing in small cap stocks. SBI Small Cap Fund has given annual returns of 49.76% in the last one year, 32.67% in 5 years and 21.43% in 15 years. On the other hand, if someone had started regular investment in this fund 15 years ago with a monthly SIP of just Rs 3000, then by now his fund value would have been more than Rs 41 lakh, whereas during this period he would have invested only Rs 5 lakh 40 thousand from his pocket in this fund.
Past Performance of SBI Small Cap Fund
SBI Small Cap Fund has performed well till 2024. The regular plan of this fund has given profits at a compounded annual growth rate (CAGR) of 21.43% per annum in the last 15 years. You can see below what is the current value of a lump sum investment of Rs 1 lakh for different periods in the scheme:
Current Fund Value of Rs 1 Lakh Lumpsum Investment:
– In 15 years (from the inception of the scheme till now):Rs 18,35,290 (CAGR : 21.43%)
– In 5 years: Rs 3,77,190 (CAGR : 30.35%)
– In 3 years : Rs 1,91,400 (CAGR : 24.14%)
– In 1 year :Rs 1,37,410 (CAGR : 37.29%)
According to the above data, if an investor had invested Rs 1 lakh in SBI Small Cap Fund 15 years ago, then its current fund value would have been more than Rs 18 lakh. That is, this fund has given more than 18 times return in 15 years! Not only this, in the last 5 years, this fund has converted Rs 1 lakh into Rs 3.77 lakh and increased the investors’ money by almost 4.75 times.
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7.65 times return on SIP investment in 15 years
SBI Small Cap Fund (Regular Plan)
- Monthly SIP : Rs 3000
- Investment period: 15 years
- Total amount invested through SIP in 15 years: Rs 5.40 lakh
- Value of SIP investment after 15 years: Rs 41,30,874 (Rs 41.3 lakh)
- Average return on SIP over 15 years (annualized): 24.13%
It is clear from this calculation that SBI Small Cap Fund has given tremendous profits to investors who deposit Rs 3000 every month through Systematic Investment Plan (SIP). In 15 years, the fund value of Rs 5.40 lakh deposited through monthly SIP has increased to more than Rs 41 lakh. That is, the scheme has given 7.65 times return on SIP investment also.
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What is the investment strategy
The managers of this fund have been investing by maintaining a balance between both growth and value investing for long term wealth creation and follow a bottom-up strategy for stock selection. The managers of this fund are R Srinivasan, Pradeep Kesavan and Mohan Lal. All three fund managers have long experience of working in the financial services sector. In this fund, an exit load of 1% is charged on withdrawal before 1 year, while there is no exit load on withdrawal after 1 year. On August 31, 2024, the expense ratio of the regular plan of the scheme was 1.56% and the expense ratio of the direct plan was 0.63%.
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Asset Allocation of SBI Small Cap Fund
As per SEBI rules, it is mandatory to invest at least 65% of the corpus of any small cap fund in shares of small cap companies. The remaining 35% of the fund can be invested in other equity shares including large cap and mid cap or in debt and money market instruments. But SBI Small Cap Fund had invested 93.14% of its total assets in equity and 6.86% in cash and cash-like assets till August 31, 2024. 84.98% of its equity portfolio was invested in small cap stocks and 4.37% in shares of mid cap companies. At the same time, 3.84% investment was in derivatives.
Top 5 Equity Holdings
- Kalpataru Projects International Ltd.: 3.67%
- GE T&D India Ltd.: 3.63%
- Finolex Industries Ltd.: 3.26%
- Blue Star Ltd.: 3.15%
- Whirlpool of India Ltd.: 2.87%
How much investment of SBI Small Cap Fund in which sector
- Capital goods: 17%
- Financial Services: 14.48%
- Consumer durables: 12.99%
- Consumer Services: 11.96%
- FMCG: 8.22%
- Construction: 7.8%
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It is important to keep the risk in mind
Before making any decision related to investing in SBI Small Cap Fund, it is important for investors to know that this fund falls in the category of Very High Risk. Due to the volatility of small cap stocks, this fund may face more fluctuations in the short term. Therefore, investors should invest keeping in mind their risk-taking ability. Also keep in mind that the past performance of a mutual fund does not guarantee the same returns in the future.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Take any investment decision only after consulting your investment advisor.)
