SBI Small Cap Fund turned Rs 10,000 monthly SIP to Rs 1.35 crore in the last 15 years with an XIRR of 24.03%. DSP Small Cap Fund turned the same monthly SIP amount to Rs 1.16 crore with an XIRR of 22.33% in the same period.
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Franklin India Smaller Cos Fund turned Rs 10,000 monthly SIP to Rs 1.13 crore in the last 15 years and offered an XIRR of 21.97%. Quant Small Cap Fund turned the monthly SIP to Rs 1.10 crore in the said period with an XIRR of 21.71%.
Kotak Small Cap Fund turned the monthly SIP to Rs 1.08 crore with an XIRR of 21.52% in the mentioned period.
The other four small cap funds turned the monthly SIP between Rs 76.20 lakh to Rs 97.87 lakh in the last 15 years with XIRR between 17.47% and 20.32%.HDFC Small Cap Fund turned the monthly SIP to Rs 97.87 lakh with an XIRR of 20.32%, followed by ICICI Pru Smallcap Fund which turned the monthly SIP to Rs 87.22 lakh with an XIRR of 19.01%.Sundaram Small Cap Fund turned the SIP investment to Rs 87.05 lakh in the last 15 years with an XIRR of 18.99%. Aditya Birla SL Small Cap Fund turned the SIP to Rs 76.20 lakh with an XIRR of 17.47% in the said period.
We considered all small cap funds that have completed 15 years in the market. We considered regular and growth options.
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Note, the above exercise is not a recommendation. The exercise was done to find which small cap funds have turned the monthly SIP of Rs 10,000 to more than Rs 1 crore in the last 15 years.
One should not make investment or redemptions decisions based on the above exercise. One should always consider risk appetite, investment horizon and goals before making investment decisions.
Small cap schemes are considered risky as they invest in the stocks of very small companies. As per Sebi norms, these schemes are mandated to invest in stocks that are ranked below 250 in terms of market capitalisation. These companies may have corporate governance issues and they can also fold up during challenging phases in the market. That is what makes investing in small cap stocks extremely risky.
However, these stocks can also reward investors handsomely. If the fund manager succeeds in spotting a company that has great potential, it may be extremely rewarding. These companies can offer very high returns. That is why small cap schemes offer very high double-digit returns (sometimes even three-digit returns) during a bull phase in the market.
ETMutualFunds always ask new and conservative investors to stay away from small cap schemes. Consider investing in small cap schemes only if you have a very high risk appetite, stomach for volatility and a longer investment horizon, say, around 10 years.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)