Small cap funds invest in equity stocks of smaller companies whose total worth of is Rs. 500 crore or less. While it makes them volatile to market dips, the potential for growth is enormous. This is especially true if you are an individual investor.
If you want aggressive growth and have been investing for some time, small cap funds are an extremely beneficial investment for you. Here is why-
- The returns from small cap funds can be enormous if they perform well. These stocks are performing extremely well over the past few years. There have been instances of returns greater than 100% in a day. This attracts many investors looking to expand their wealth.
- They allow diversification of your portfolio.
- Some small capfunds perform well even when large cap funds do not put up impressive performances.
- They usually do not attract much attention from institutional investors, which makes them an untapped resource. Keep your eye out for investment opportunities in small capfunds and watch your investment reap huge returns.
- If you are a seasoned investor who has a good idea about the entry and exit times, not investing in small capfunds is missing an opportunity to expand your wealth.
- If you are in for the long race and can stomach lows of the market, you must invest in small capfunds, as their long term performance is impressive.
- Smaller companies offer more flexibility to investors as compared to large cap
- There are always chances that larger companies acquire the small companies that you invest in. This means attractive prospects for your finances if you have invested in such companies.
Prudent selection of stocks is crucial for the successful performance of any portfolio. Selecting small cap funds is a beneficial decision if you are a young investor who knows how the market works and aggressive growth is your style. It is recommended that you remain invested for at least 5 to 6 years to reap significant returns.
mutual fund investment app 