SIPs In These CRISIL Rated Small Cap Funds Can Yield Good Returns If You Have A Longer Term

Top Best Small Cap Mutual Funds And Their Past Returns In Charts:

Note we have taken SIP investment into perspective and returns mentioned are annualized returns:

Small cap fund	AUM	NAV as on May 21, 2021	1-year	3-year	5-year gains in %
Union Small Cap Fund-Regular Plan-G	445 cr	23.19	91%	34%	20%
Aditya Birla Sun Life Small Cap fund D-Growth	2589 cr	50.66	103%	28%	15%
Axis Small Cap Fund Direct Plan-G
	4854 cr	53.52	88%	36%	25%
Kotak Small Cap Fund- G	3712 cr	144	120%	42%	25%
	Nippon India Small Cap Fund-Growth	13085 cr	65.99	110%	36%	23%

1. Union Small Cap Fund-Regular Plan-G:

It is a CRISIL4-star rated fund . Expense ratio is of 2.57 percent and some of the fund’s top holdings are in stocks Happiest Minds, Navin Fluroine, CSB Bank, Rossai Biotech, Greaves Cotton etc. Lump sum investment has to be for Rs. 5000 while the SIP in the fund can be started for as less as Rs. 2000.

2. Aditya Birla Sun Life Small Cap fund Direct –Growth:

It is a 2 star CRISIL rated fund. Expense ratio of the fund is 1.11% and the scheme in a 1-year period has underperformed its index with gains of 121% considering one time investment. Top holdings of the fund include Deepak Nitrite, Cyient, JK Cement, Just Dial, Radico Khaitan etc. Minimum one time investment as well as SIP investment in the fund is fixed at Rs. 1000.

3. Axis Small Cap Fund:

It is a CRISIL 4 star rated fund indicating good performance over peers. Expense ratio is at 0.41%. Minimum SIP investment can be made at Rs. 500 while for lump sum the investment has to be of Rs. 5000. Top holdings of the fund Galaxy Surfactants, Tata Elxsi, Fine Organic, Brigade Enterprises, JK Lakshmi Cement etc.

4. Kotak Small Cap Fund- G:

It is a CRISIL 5-star rated fund with expense ratio of 0.57 percent. The SIP contribution in the fund can be started with Rs. 1000 and for one time Rs. 5000 investment is needed. The fund’s holding include Century Plyboards, Carborundum, Sheela Foam, Supreme Industries, Persistent Systems among other.

5. Nippon India Small Cap Fund-Growth:

This is again a 3-star rated CRISIL fund. SIP in the fund can be started for just Rs. 100 and for one time one needs to invest Rs. 5000. The fund’s allocations are in Deepak Nitrite, Tube Investments, Bajaj Electricals, Navin Fluorine, Balrampur Chini Mills.

Points to note when considering investment in small cap mutual funds:

1. Longer tenure of 7-10 years.:

As the small cap mutual fund category exposes one to high volatility and risk, one can delve in the only if they wish to possibly earn a higher return and have a longer tenure of 7-10 years. This is also because if they happen to incur losses they may be in a position to recover losses to some extent if not fully.

2. Include this mutual fund category only to may be supplement your returns:

Here the need be that you take a calculated risk to add up to your investment portfolio by adding small cap mutual funds as these do not earn stable returns.

3. Diligently identify small companies, fund managers:

Select the small companies who have strong fundaments and go with fund manager and AMC that have emerged winners in delivering good return in their space.

4. Do not invest in them only in the lure of small cap funds delivering big:

As in the current scenario, while average return on these schemes is over 100 percent, just don’t get into them as current or past performance should just not be the sole measure for picking a stock or mutual fund for that matter. There is a cycle for every category to outperform and currently it is the small cap that have been rallying.

GoodReturns.in