Deepshikha | Nov 18, 2021 |
Top 10 Small-Cap Mutual Funds to Invest in November 2021
Small-cap funds are equity funds whose portfolio is mostly made up of equities and equity-linked instruments issued by firms listed after the top 250 in terms of market capitalization. The underlying companies of small-cap corporations have a market capitalization of between Rs 10 crore and Rs 500 crore.
Because these businesses are small, they have a lot of room to develop. As a result, small-cap companies have a substantially higher potential for returns than mid-cap and large-cap funds. On the other hand, the risk associated with these funds is also larger. Small-cap funds can be quite volatile.
| Quant Small Cap Fund – Direct Plan-Growth |
| Axis Small Cap Fund – Direct Plan-Growth |
| Tata Small Cap Fund – Direct Plan-Growth |
| Invesco India Small Cap Fund – Direct Plan-Growth |
| Union Small Cap Fund – Direct Plan-Growth |
| Sundaram Small Cap Fund Direct Plan-Growth |
| IDBI Small Cap Fund Direct Plan-Growth |
| HSBC Small Cap Equity Fund – Growth Direct |
| Franklin India Smaller Companies Fund – Direct Plan-Growth |
| UTI Small Cap Fund – Direct Plan-Growth |
Small-cap funds are noted for their high-return potential. When the markets are optimistic, these funds have a better chance of exceeding the benchmark. When the markets are in a slump, however, the fund’s NAV is adversely impacted. These funds are significantly influenced by market movements.
Small-cap funds are a good option if you’re willing to take a risk to maximize your portfolio’s returns. Investing a tiny amount of your portfolio in small-cap funds for the long run can produce outstanding results. These funds may not appeal to risk-averse investors because they can be volatile at times.
The finest small-cap mutual funds have historically delivered exponential growth and returns. Given that these stocks are less scrutinized and traded by major investors, there is a significant probability that small-cap funds will find some inexpensive stocks among small-size companies. When the markets are flourishing, these funds are predicted to do well. To get high profits, you must invest for at least five years.
As previously stated, small-cap funds are a sort of equity fund. As a result, these funds have the same risks as any other equity fund strategy. These funds are subject to market risk, concentration risk, and volatility risk. Great-risk investments have a high-profit potential.
By investing over a long period through a systematic investment plan (SIP), you can greatly reduce your risk (say five years and more). Because these products demand a long-term investment perspective, they are only suitable if you are willing to assume some risk and can commit to a five-year investing period.
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