SBI Small Cap Fund offered 2.53% return in September against 1.74% by its benchmark (BSE 250 Small Cap – TRI). Tata Small Cap Fund offered 2.97% return in the same time period against 1.40% by its benchmark (Nifty Smallcap 250 – TRI).
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Kotak Small Cap Fund delivered 3.54% return in the mentioned period against 1.40% by its benchmark Nifty Smallcap 250 – TRI. HSBC Small Cap Fund and ICICI Pru Smallcap Fund delivered 1.88% and 1.65% returns respectively in the mentioned period.
Mahindra Manulife Small Cap Fund which is benchmarked against BSE 250 Small Cap – TRI gave 2.02% against 1.74% by the benchmark.
Axis Small Cap Fund and Bank of India Small Cap Fund delivered 3.84% and 2.65% returns respectively in September against 1.40% by their benchmark (Nifty Smallcap 250 – TRI).
Underperformers
Nippon India Small Cap Fund, the largest small cap fund based on assets managed, gave 1.15% return against 1.40% by its benchmark (Nifty Smallcap 250 – TRI) in the same month.
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Franklin India Smaller Cos Fund and Quant Small Cap Fund offered 0.37% and 1.36% returns respectively in September against 1.40% by their benchmark (Nifty Smallcap 250 – TRI).
DSP Small Cap Fund posted a return of 1.02% in September against 1.74% by its benchmark (BSE 250 Small Cap – TRI). HDFC Small Cap Fund delivered a negative return of 0.06% in September. LIC MF Small Cap Fund gave 1.18% return against 1.40% by its benchmark (Nifty Smallcap 250 – TRI).
Quantum Small Cap Fund posted a negative return of 0.71% in September against 1.74% by its benchmark (BSE 250 Small Cap – TRI).
The small cap funds gave an average return of around 2.09% in September. These schemes are benchmarked against Nifty Smallcap 250 – TRI and BSE 250 Small Cap – TRI which gave 1.40% and 1.74% return in the same period.
Small cap schemes invest in very small companies or their stocks. That is why investing in small cap stocks is considered extremely risky. The small cap segment can be extremely volatile in the short term, but they have the potential to offer very high returns over a long period. Small cap schemes are recommended only to aggressive investors with a high-risk appetite and long investment horizon, say, around seven to 10 years. ETMutualFunds do not recommend small cap schemes to new and inexperienced investors.
Note, the above exercise is not a recommendation. This exercise was just to analyse the performance of small cap funds against their respective benchmarks in September. You need to include other factors while choosing a scheme to invest in. One should always consider their risk appetite, investment horizon, and goals before choosing mutual funds. One should not make investment or redemption decisions based on the above returns. Past performance does not guarantee future performance.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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