In the calendar year, S&P Small Cap Index which was trading at 70% premium had fallen by 50% in the past 8 months. Other than this, the market also got panicked due to sudden fall in the DHFL, IL&FS, and Infibeam share prices and because of which S&P BSE has fallen by 2.30% in the past one month (as on Nov 2, 2018). Due to this sharp contrast, many small-cap mutual funds have also opened their investments now. So, if you are also keen to invest in the small-cap funds after the recent market correction process, then have a look at the table as well as other details provided further.
Top Small Cap Funds to Invest Now
The below-listed funds are consistent and offered consistent returns to the investors from the past many years. SIP is the most optimal way to invest in these funds as it offers compounding benefits to investors.
If you are interested in investing any of the funds provided above, then have a look at their details mentioned below:
1. Reliance Small Cap Fund- Growth Plan
The fund was launched in the year 2010 and has provided the annualised returns of 18.42% since then. It is managed by Mr Dhrumil Shah and Mr Samir Rachh. They invest approximately 70%-75% of the total average market capitalisation in small-caps. The rest amount is invested in the large and mid-cap companies.
The current AUM of Reliance Small Cap is Rs 6,812 Cr (as on Sept 30, 2018). The fund has delivered the alpha of 6.64% by generating the returns of 14.07% in the past three years, 30.74% in five years, and 23.44% in seven years, outperforming the benchmark as well as category’s average. It does not take lumpsum investment, so investors need to invest via SIP only.
2. L&T Emerging Businesses Fund- Growth Plan
Launched in the year 2014, it has already delivered the annualised returns of 22.05% since launch. It has an AUM of Rs 5,045 Cr (as on Sept 30, 2018) from which 50% is invested in mid-cap and 50% in small-cap stocks keeping approximately 80-90 stocks at any time of the market in its portfolio.
The fund managers of L&T Emerging Businesses Fund G, Mr S N Lahiri and Mr Karan Desai are following the growth investment approach which helps it to grow magnificently. It has generated high returns in the past three years of 18.12% by outperforming the benchmark as well as peers.
3. HDFC Small Cap Fund- Growth Plan
Launched in the year 2008, it has delivered an annualised returns of 14.51% in the past 10 years. It is the most consistent fund in the small-cap category, which has always outperformed the benchmark and category except for the year 2015.
The fund is being managed by Mr Chirag Setalvad and has reached the AUM of Rs 4,948 Cr (as on Sept 30, 2018). He has been investing 62% of the corpus in small-cap, 31% in mid-cap, and the rest in the large-cap companies. The fund manager is following the growth investment philosophy for picking up the stocks across the small-cap space.
4. SBI Small Cap Fund- Growth Plan
Launched in the year 2009, SBI Small Cap has delivered the annualised returns of 19.04% since then. The fund is a consistent performer from the past many years except for the year 2016. It is investing 83% of its total corpus in small-cap stocks and the rest in mid and large-cap stocks.
The fund is highly diversified in various sectors to adjust the risk in the portfolio. The fund has opened up for fresh investments in May 2018, which were closed in 2015.
These were some of the most promising small cap funds, which have offered high returns to the investors in the past few years and expected to do the same in future as well. So, investors can invest in them as the market has corrected and small-caps are expected to give positive returns.
The author is a financial analyst working with MySIPonline. She is a mutual fund specialist and analyses them closely to offer the best suggestions to the investors.