AMFI mutual fund data of the last one year shows continuously increasing interest in small- and mid-cap mutual funds, while large-cap mutual funds are taking a dip. Small-cap mutual funds invest money in small-cap equities and are highly market volatile. There can be many ups and downs in their value, and they are not considered a good choice for investors with a low-risk appetite.
Yet, the charm of small-cap mutual funs is not dying down and investors are heavily putting their money in them.
The AMFI data of the last one year shows that small caps have seen an inflow of Rs 34,188 crore, while mid caps have witnessed an inflow of Rs 20,969 crore during the same period.
In contrast, large caps are at the receiving end, seeing an outflow of Rs 4,608 crore in the one-year period ending September.
Chandraprakash Padiyar, Senior Fund Manager, Tata Asset Management, said that the small-cap can continue grabbing the limelight for another three years.
“There has been high growth in small caps since most of the companies in this segment are related to retail and manufacturing, which have got a boost because of the government’s campaigns, such as Atmanirbhar Bharat and Make in India. Indian companies are manufacturing for the world now. Though the scale of manufacturing for other countries is small, many of these companies are associated with small mutual funds.”
He added, “These companies have been growing, and investors are putting their faith in these companies. I see these companies growing more in the next 3 years, so the trend of small caps performing well will continue.”
As small funds get traction, ZeeBiz takes you through the list of seven small-cap equity funds that have given the maximum investment returns in the last three years.
Quant Small Fund- Direct Plan
It has given annualised returns of 47.15 per cent in three years against the small-cap category average of 38.37 per cent.
The Rs 9,089.12 crore fund has an NAV size of Rs 197.64 as on October 12 and the fund’s expense ratio is 0.77 per cent.
An investment of Rs 10,000 three years ago would have become Rs 31,664.70 in three years in the direct plan.
The fund with a 5-star Crisil rating has 95.63 per cent of its investments in equities.
The small-cap fund has a set of 94 stocks with Reliance Industries Limited, Jio Financial Services and Bikaji Foods as the main stocks in its portfolio.
Nippon India Small Cap Fund – Direct Plan- Growth
The Rs 37,374.4 crore fund from the House of Nippon India Mutual Fund has given annualised returns of 45.80 per cent in the last three years.
With an NAV size of Rs 137.37 as on October 12, the expanse ratio of the fund is 0.72 per cent.
An investment of Rs 10,000 three years ago would have given Rs 30,990.60 in the current times.
The 5-star Crisil rating fund has a total of 200 stocks in its portfolio, against the category average of 82.96.
The fund has 97.04 per cent of its investments in equity shares.
Tube Investments of India Limited, HDFC Bank, and Apar Industries are the leading stocks in its portfolio.
Quant Small Cap Fund – Growth
The fund in No. 3 position in the category is Quant Small Cap Fund, which has given annualised returns of 44.8 per cent in the last three years.
With a size of Rs 9,089.12 crore, the fund has an NAV of Rs 184.97 as on October 12.
The 5-star Crisil rating fund from the House of Quant Mutual Fund has an expense ratio of 1.78 per cent against the category average of 1.83 per cent.
An investment of Rs 10,000 three years ago would have given one a total of Rs 30,410.70.
Nippon India Small Cap Fund- Growth
The fund that started in September 2010 has given annualised returns of 44.52 per cent in the last three years.
Rs 10,000 invested in the fund three years ago would have become Rs 30,183.30 in present times.
The 5-star Crisil rating fund has a size of Rs 37,374.4 crore with an NAV size of Rs 124.28 as on October 12.
HSBC Small Cap Fund – Direct Plan – Growth
The fund from the House of L&T Mutual Fund has given 43.73 per cent annualised returns in the last three years.
The 3-star Crisil rating fund has a total size of Rs 11,650.11 crore with an NAV of Rs 68.43 as on October 12.
The fund, which started in May 2014, has an expense ratio of 0.71 per cent.
Rs 10,000 invested in the fund three years ago would have given an investor Rs 29,692.20 in today’s time.
The fund has 98.92 per cent of its holdings in equities with Apar Industries, KPR Mill Road, KEI Industries Limited, and Cera Sanitaryware as its top stocks in its portfolio.
Tata Small Cap Fund – Direct Plan – Growth
The fund from the House of Tata Mutual Fund is a Crisil 4-star fund with an annualised return of 42.63 per cent in three years.
The fund, which began its journey in November 2018, has swelled to Rs 6,134.53 crore in its size.
The fund’s NAV was Rs 32.61 as on October 12, and its expense ratio is 0.31 per cent against the category expense ratio of 0.7 per cent.
Had one invested Rs 10,000 in the fund three years ago, it would have become Rs 29,017.30 as per the current market value.
With a buffet of 60 stocks, the fund has 89.94 per cent of its investment in equities and 65.31 per cent of them are small-cap investments.
IDFC, Quess Corp., and BASF India Ltd are the top stocks in the Tata company fund portfolio.
HSBC Small Cap Fund – Growth
The 3-star Crisil fund has an NAV of Rs 62.70 as on October 12 and an expense ratio of 1.73 per cent.
The fund has given an annualised return of 42.22 per cent in the last three years.
It means Rs 10,000 invested in the fund from the L & T Mutual Fund House would have become Rs 28,764.90 at present.