Small-cap mutual funds invest in smaller companies, typically ranked in the bottom 250 in market capitalisation. They promise potentially high returns but carry significant risk due to their volatility. These funds are suitable for aggressive investors seeking high-growth opportunities.
Fund Name
|
AUM
|
3Y Returns
|
Ratings
|
|
---|---|---|---|---|
Bandhan Small Cap Fund Equity Small Cap Fund |
₹9,516.16 Cr. |
29.06% |
0 |
|
Bandhan Small Cap Fund Direct Plan IDCW Reinvestment Equity Small Cap Fund |
₹9,516.16 Cr. |
28.93% |
0 |
|
ITI Small Cap Fund Equity Small Cap Fund |
₹2,219.20 Cr. |
27.4% |
0 |
|
ITI Small Cap Fund Direct Plan IDCW Reinvestment Equity Small Cap Fund |
₹2,219.20 Cr. |
26% |
0 |
|
ITI Small Cap Fund Direct Plan IDCW Reinvestment Equity Small Cap Fund |
₹2,219.20 Cr. |
26% |
0 |
|
Invesco India Smallcap Fund Direct Plan IDCW (Payout / Reinvestment) Equity Small Cap Fund |
₹5,884.64 Cr. |
25.97% |
1 |
|
Invesco India Smallcap Fund Direct Plan IDCW (Payout / Reinvestment) Equity Small Cap Fund |
₹5,884.64 Cr. |
25.97% |
1 |
|
Invesco India Smallcap Fund Equity Small Cap Fund |
₹5,884.64 Cr. |
25.92% |
1 |
|
Quant Small Cap Fund IDCW Direct Plan Reinvestment Equity Small Cap Fund |
₹24,892.62 Cr. |
24.51% |
0 |
|
Quant Small Cap Fund IDCW Direct Plan Reinvestment Equity Small Cap Fund |
₹24,892.62 Cr. |
24.51% |
4 |
Mutual funds that invest primarily in companies with a market capitalisation below ₹5,000 crore are called small cap mutual funds. These companies are generally ranked beyond the top 250 in terms of market capitalisation on stock exchanges like the NSE and BSE in India.
Small cap funds are known for their high growth potential. Many new investors are drawn to them due to the possibility of high returns. However, it’s important to understand that these funds are also subject to higher market volatility and risk. The performance of small-cap stocks can fluctuate significantly, especially during periods of market correction or economic instability.
Small cap mutual funds allocate at least 65% of their total assets into equities of small-cap companies, as defined by SEBI (Securities and Exchange Board of India). These companies, while relatively smaller in size, often have strong potential for expansion and innovation, which can lead to substantial gains over time.
However, because small-cap companies are still growing and may lack financial stability, they tend to be more affected by economic downturns or operational challenges. Therefore, small cap mutual funds are suitable for investors with a higher risk tolerance and a long-term investment horizon of at least 7–10 years.
In summary, small cap mutual funds offer an exciting opportunity for investors seeking long-term capital appreciation. However, they demand patience, due diligence, and the ability to ride out short-term market ups and downs.
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