If you are looking for higher returns and unable to find the right financial instrument to help you, opt for small-cap funds. Ideal for long-term investors with a moderate to high-risk appetite, these funds invests in shares of companies whose market capitalisation is less than Rs 5000 Cr.
To be identified as a small-cap fund, a fund must ideally allocate more than 65% of its resources towards the shares of small cap companies. Amongst the various categories of mutual funds, these funds have the capacity to provide the highest returns. However, this also makes small-cap funds a somewhat risky investment. It is thus recommended that you diversify your investments according to your objectives.
Here are the best performing small-cap funds of 2018 –
- Reliance Small Cap Fund
This fund was started on September 2010 with an AUM of Rs 6,371 Cr. Consistently beating the S&P benchmark index; the fund has a 5-star rating. Its highest allocation is towards consumer goods (21.7%) followed by manufacturing (15%).
It has generated returns of over 30% since 2010.
- L&T Emerging Businesses Fund
An equity-oriented fund, the L&T Emerging Businesses Fund was launched in May 2014. Some companies in its portfolio are Aarti Industries Ltd, Rane Holdings Ltd and Nocil Ltd.
The fund has an AUM of Rs 4,286 Cr and has surpassed the S&P BSE SmallCap benchmark multiple times.
- Sundaram Small Cap Fund
Launched on February 2005, Sundaram Small Cap Fund has an AUM of Rs 1,481 Cr. Over the years it has beaten the S&P SmallCap benchmark index on a consistent basis. Some companies in its portfolio are JK Cement Ltd, Heritage Foods Ltd and NRB Bearings Ltd. The maximum corpus of the fund has been allocated to industrial manufacturing (19.3%), construction (13%) followed by financial services (12.8%). It has delivered returns of 22.16% since its inception.
- SBI Small Cap Fund
SBI Small Cap Fund was launched on September 2009. It is an equity-oriented fund with an AUM of Rs 943 Cr. The fund has holdings in LT Foods Ltd., Relaxo Footwear, Hawkins Cooker Ltd. The fund’s maximum share is in consumer goods (23.6%), industrial manufacturing (17.8%) followed by services (14%). It has delivered returns of 32.7 since its launch date.
These are some funds you can go through if you are looking to invest in small cap funds. Proving high returns, the best way to invest in them is through an online investment app.
mutual fund investment app 