The size of the company is an important criterion when selecting equity portfolios. This is because, depending on the size of the company, the mutual fund portfolio would have its unique set of opportunities and risks. Thus this article on Best small and midcap fund will help you to know about them in detail.
Best Small Cap Mutual Funds invest in stocks of small companies that have the potential for growth. These stock can double or triple in a short time of just a few years, but this also implies that the return from these funds is subject to high market risk.
Mid-cap mutual fund schemes invest in stocks of mid-sized companies or stocks with medium market capitalizations. For mid-cap, the market capitalization ranges between Rs. 500 crore to Rs. 10000 crore.
Best Small Cap Funds in 2019
|Fund Name||1 year||3 Year||5 Year|
|Axis Small Cap Fund||0.73%||13.25%||19.54%|
|Franklin India Smaller Companies Fund||0.63%||4.20%||10.14%|
|HDFC Small Cap Fund||0.92%||20.97%||19.82%|
|L&T Emerging Businesses Fund||-3.36%||9.23%||14.35%|
|Reliance Small Cap Fund||-6.99%||18.37%||24.63%|
Axis Small Cap Fund
Axis Small Cap Fund was launched in November 2013. It is a relatively aggressive fund that has no exposure to the large-cap equities. The scheme has maintained its dynamic position in the sector-wise allocation of funds. It has given a higher weight age to consumption-driven sectors, such as Chemicals and Industrial Manufacturing. The following diagram is a comparison between Axis small-cap fund and its benchmark ie NIFTY small cap 100 TRI.
Franklin India Smaller Companies Fund
Franklin India Smaller Companies Fund has been present in the market since January 2006. The scheme features an extraordinary performance record. The scheme follows a balanced approach in the allocation of its assets. It has adopted a relatively conservative approach while allocating its assets across market capitalizations (15% in large caps) and an aggressive approach while allocating them across sectors. The following diagram is a comparison between Franklin India Smaller Companies Fund and its benchmark ie NIFTY small cap 250 & NIFTY 50.
HDFC Small Cap Fund
HDFC Small Cap Fund is a time-tested fund which has been there in the category for over a decade now. It is a relatively aggressive small-cap fund that holds just 6% of its assets in large-cap funds. As far as the sector-wise allocation is concerned, the scheme is on consumption-driven sectors than sectors like pharmaceuticals. The aggressive approach of the scheme gives it the potential to earn high returns for relatively high risk. The following diagram is a comparison between HDFC Small Cap Fund and its benchmark ie NIFTY small cap 100 TRI.
L&T Emerging Businesses Fund
L&T Emerging Businesses Fund is a recent addition to the small-cap category. The scheme, which was launched in May 2014, is an aggressive small-cap fund that has invested more than half of its assets in small caps and almost the entire balance in mid-caps. The scheme is aggressive in the sector-wise allocation of its funds as well as it has given a higher weight age to cyclical sectors in its portfolio. The following diagram is a comparison between L&T Emerging Businesses Fund and its benchmark ie S&P BSE Small cap TRI.
Reliance Small Cap Fund
Reliance Small Cap Fund is a conservative small-cap fund. This fund has given a weight age of 10% to large caps in its portfolio. The Scheme is available under Growth and Dividend (both pay-out and reinvestment) plan. The top 3 underlying investments are West Coast Paper Mills, VIP Industries and Deepak Nitrite. The following diagram is a comparison between reliance Small Cap Fund and its benchmark ie S&P BSE Small cap TRI.
Best Mid Cap Funds on 2019
L&T Mid Cap Funds
L&T Midcap Fund is a nearly 15-year-old fund that made its debut on August 2004. It is an ideal mid-cap fund for long-term investments of at least 5 years wherein it has given returns better than its benchmark. It follows an aggressive strategy in the allocation of its assets across both market capitalizations and sectors. This makes it fit for investors who have a moderate to high-risk appetite. The following diagram is a comparison between L&T Midcap Fund and its benchmark ie NIFTY midcap 100 TRI.
Invesco India Midcap Fund
Invesco India Midcap Fund has demonstrated an impressive performance track record since its inception in April 2007. The scheme has succeeded in outperforming its benchmark in all the three mentioned tenures – 1 year, 3 years as well as 5 years. It follows a relatively aggressive approach when it comes to the allocation of its assets across market caps. This style of asset allocation helps it in featuring a moderately high-risk level. The following diagram is a comparison between Invesco India Midcap Fund and its benchmark ie NIFTY midcap 100 TRI.
DSP Mid Cap Fund
DSP Midcap Fund is an established midcap fund which was launched in November 2006. It is a relatively conservative mid-cap fund that has given significant exposure to large caps (13%) in its portfolio. As far as the scheme’s allocation of assets across sectors is concerned, it is a little tilted towards the aggressive consumption-driven sectors to which it has allocated nearly 60% of its assets. The considerable large-cap inclusion helps the scheme in yielding consistent and stable returns. The following diagram is a comparison between DSP Midcap Fund and its benchmark ie NIFTY midcap 100 TRI.
Kotak Emerging Equity Fund
Kotak Emerging Equity Scheme is one of the mid-cap funds that has been in the space for more than a decade now. It is a well-performing scheme that has outperformed its benchmark during both short and long term periods. It is a relatively aggressive mid-cap fund that has given minimal exposure to large caps in its portfolio and has invested a majority of its assets in consumption-driven sectors. The following diagram is a comparison between Kotak Emerging Equity Scheme and its benchmark ie NIFTY midcap 100 TRI.
HDFC Midcap Opportunities Fund
HDFC Midcap Opportunities Fund is a high-returns generating mid-cap fund that has been in the market for nearly 12 years now. It is a relatively aggressive mid-cap fund that holds just 3% of its assets in large caps. In the sector-wise allocation of its assets also, the scheme has adopted an aggressive approach as it has invested a majority of its assets in consumption-driven sectors. The following diagram is a comparison between HDFC Midcap Opportunities Fund and its benchmark ie NIFTY midcap 100 TRI.
Small-cap funds are suitable for investors who are willing to take a high amount of risk with their capital, have a longer time horizon for their investments and are looking for higher returns compared to blue-chip companies.
Investors who are looking for faster growth and high-risk appetite for risks compared to those of large-cap funds should invest in mid-cap funds. Investors who are ready to live with the volatility of these stocks in expectations of fascinating returns should go ahead with midcap funds.
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These funds have been shortlisted by undertaking certain parameters like NAV, past performances, peer average returns, etc. All the data is updated and is dated 19 July 2019.