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Best Small Cap Mutual Funds in 2024
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Mutual Funds provide individuals with liquidity and diverse investment options. Besides there are diverse scheme variants available in the market likewise small cap, mid cap, large cap, and multi-cap. As an investor or reader, you must be thinking what is Small cap mutual fund? Also if you are thinking about future financial solutions and looking for some of 5 best small-cap mutual funds in 2024 then you are at the right place. So Today we are covering some top schemes of Small Cap Mutual Funds but before that let's know in brief about small-cap mutual funds
Equity funds classified as small-cap funds invest in Indian small companies (those with a market capitalization of less than Rs.5,000 crores). Most of these businesses are unknown to us daily and are not among the top 250 corporations. Small-cap firms can yield amazing profits, but they can also be quite volatile and result in losses over the short to medium term.
Now let's see some top Small Cap Mutual Funds that are getting benefits from the Government’s development in this sector and then you can decide how to take advantage of it.
Advantages of Small Cap Funds
In this section we will see some advantages of Small Cap Funds.
-
Invest early in businesses that have the potential to become future giants and get the rewards.
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Exposure to significant risk as a result of inadequate financial stability to endure challenging market conditions.
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Perfect for investors with a 7+ year investment horizon who are extremely aggressive.
Below is the list of best small cap mutual funds for long term:
1). Quant Small Cap Fund Direct Plan-Growth
Objective- The scheme invests in a well-diversified portfolio of small-cap companies to produce a rise in capital.
Returns Performance- Over the past 10 years, this Scheme has produced the highest return among small-cap funds.
Chance: For investors who have held this fund for at least 5 years, it has produced an annual return of 7.46% in 70% of the cases.
Return/Risk: This fund generates 20% higher returns for each unit of risk it takes.
|
Fund House |
Quant Mutual Fund |
|
Launch Date |
01 Jan 2013 |
|
Expense Ratio |
0.64% as of Jul 31, 2024 |
|
Exit Load |
1% if redeemed within 1 year |
|
AUM |
Rs.24,530 Cr |
|
Benchmark |
NIFTY Smallcap 250 TRI |
|
Min. Investment |
Rs.5000. |
|
Risk |
Very High |
|
1 Year Returns |
55.35% |
Asset Allocation of Equity
|
Equity |
Asset (%) |
|
Large Cap |
18.54% |
|
Mid Cap |
2.27% |
|
Small Cap |
66.28% |
Top 3 Stock Holdings
|
Company |
Holdings |
|
Reliance Industries Ltd. |
9.57% |
|
JIO Financial Services Ltd. |
4.88% |
|
Aegis Logistics Ltd. |
4.46% |
Detailed Video:
Some Schemes mentioned below are among the best small cap mutual funds for SIP:
2). Nippon India Small Cap Fund Direct-Growth
Objective- The Scheme invests primarily in equity and equity-related securities of small cap companies with the goal of producing long-term capital appreciation.
Returns Performance- Over the past 10 years, this product has produced the highest return among small-cap funds.
Chance: For investors who have held this fund for at least 5 years, the yearly return has been 16.98% in 70% of the cases.
Return/Risk: This fund generates 20% higher returns for each unit of risk it takes.
|
Fund House |
Nippon India Mutual Fund |
|
Launch Date |
01 Jan 2013 |
|
Expense Ratio |
0.63% as of Jul 31, 2024 |
|
Exit Load |
1% if redeemed within 1 year |
|
AUM |
Rs.60,373 Cr |
|
Benchmark |
NIFTY Smallcap 250 TRI |
|
Min. Investment |
SIP Rs.500. |
|
Risk |
Very High |
|
1 Year Returns |
49.81% |
Asset Allocation of Equity
|
Equity |
Asset (%) |
|
Large Cap |
11.93% |
|
Mid Cap |
12.74% |
|
Small Cap |
71.26% |
Top 3 Stock Holdings
|
Company |
Holdings |
|
HDFC Bank Ltd. |
1.78% |
|
Kirloskar Brothers Ltd. |
1.77% |
|
Tube Investments Of India Ltd. |
1.71% |
3). Bank of India Small Cap Fund Direct-Growth
Objective- The program invests primarily in equity and equity-related instruments of small cap companies to create long-term capital growth.
Returns Performance- Over the past 5 years, this product has produced the highest return among small-cap funds.
Return/Risk: This fund generates 20% higher returns for each unit of risk it takes.
|
Fund House |
Bank of India Mutual Fund |
|
Launch Date |
28 Nov 2018 |
|
Expense Ratio |
0.55% as of Jul 31, 2024 |
|
Exit Load |
1% if redeemed within 1 year |
|
AUM |
Rs.1,341 Cr |
|
Benchmark |
NIFTY Smallcap 250 TRI |
|
Min. Investment |
Rs.5000. |
|
Risk |
Very High |
|
1 Year Returns |
52.27% |
Asset Allocation of Equity
|
Equity |
Asset (%) |
|
Large Cap |
4.54% |
|
Mid Cap |
9.78% |
|
Small Cap |
82.93% |
|
Other |
0.01% |
Top 3 Stock Holdings
|
Company |
Holdings |
|
Castrol India Ltd. |
2.64% |
|
Amara Raja Energy & Mobility Ltd |
2.38% |
|
Vijaya Diagnostic Centre Ltd. |
2.36% |
4). Tata Small Cap Fund Direct-Growth
Objective- The scheme primarily invests in stock and equity-related securities of small cap companies to create long-term wealth appreciation.
Returns Performance- Over the past 5 years, this Scheme has given the highest return among small-cap funds.
Chance: For investors who have held this fund for at least 5 years, the yearly return has been 28.14% in 70% of the cases
Return/Risk: This fund generates 20% higher returns for each unit of risk it takes.
|
Fund House |
Tata Mutual Fund |
|
Launch Date |
19 Oct 2018 |
|
Expense Ratio |
0.3% as of Jul 31, 2024 |
|
Exit Load |
1% if redeemed within 1 year |
|
AUM |
Rs.8,449 Cr |
|
Benchmark |
NIFTY Smallcap 250 TRI |
|
Min. Investment |
Rs.500. |
|
Risk |
Very High |
|
1 Year Returns |
48.1% |
Asset Allocation of Equity
|
Equity |
Asset (%) |
|
Large Cap |
0% |
|
Mid Cap |
4.57% |
|
Small Cap |
88.13% |
Top 3 Stock Holdings
|
Company |
Holdings |
|
BASF India Ltd. |
5.63% |
|
Quess Corp Ltd. |
4.07% |
|
Kirloskar Pneumatic Company Ltd. |
3.61% |
5). Invesco India Smallcap Fund Direct-Growth
Objective- The scheme's main objective is to primarily invest in stocks of small-cap companies to produce wealth appreciation.
Returns Performance- Over the past 5 years, this Scheme has given the highest return among small-cap funds.
Return/Risk: This fund generates 20% higher returns for each unit of risk it takes.
|
Fund House |
Invesco Mutual Fund |
|
Launch Date |
10 Oct 2018 |
|
Expense Ratio |
0.41% as of Jul 31, 2024 |
|
Exit Load |
1% if redeemed within 1 year |
|
AUM |
Rs.4,860 Cr |
|
Benchmark |
BSE 250 SmallCap TRI |
|
Min. Investment |
Rs.1000. |
|
Risk |
Very High |
|
1 Year Returns |
57.11% |
Asset Allocation of Equity
|
Equity |
Asset (%) |
|
Large Cap |
5.01% |
|
Mid Cap |
28.16% |
|
Small Cap |
65.96% |
Top 3 Stock Holdings
|
Company |
Holdings |
|
Century Textiles & Industries Ltd. |
3.29% |
|
360 One Wam Ltd |
3.1% |
|
Jyoti CNC Automation Ltd. |
2.77% |
Conclusion:
Various Schemes by investing in small cap companies have produced higher returns. Pararelly others have performed poorly. Investors who want to make investments in small-cap mutual funds and for long-horizon might have an opportunity to look for the same after carefully examining the offerings, risk levels, and time horizons.
Disclaimer: This content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.
Frequently Asked Questions
Small cap through SIP can be a good choice for high-risk tolerant, long horizon investors say 7 or 10 years.
Some best small cap funds for 2024 based on their returns are:
- Invesco India Smallcap Fund Direct-Growth
- Tata Small Cap Fund Direct-Growth
- Bank of India Small Cap Fund Direct-Growth
- Quant Small Cap Fund Direct Plan-Growth
- Nippon India Small Cap Fund Direct-Growth
Small cap MF are suitable for periods of 8 to 10 years. This makes these funds ideal for investors with a long time horizon. Small Cap Funds have a significant chance of producing returns that exceed benchmarks.
Things to think about before purchasing Small Cap Mutual Funds. Before making an investment in small-cap funds, you should be aware of your tolerance for risk as these funds are more volatile and risky than large-cap funds.
