#SmallCapMutualFunds

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How to Choose the Best Mid Cap Mutual Funds in India

Investing in mid cap mutual funds can be a great way to get exposure to emerging companies in India that have the potential for high growth. Mid caps are companies that have a market capitalization between Rs 5,000 crore and Rs 20,000 crore. They are bigger than small caps but smaller than large caps. Mid cap funds aim to generate higher returns by investing predominantly in mid-sized companies. 

There are many types of mutual funds in India such as equity funds, debt funds, hybrid funds, solution-oriented funds, and more. Mid cap funds fall under the broad equity fund category. Equity funds aim to generate higher returns by investing in shares of companies across market capitalizations. Within equity funds, you have options like large cap, mid cap, small cap, multi cap, sectoral, thematic, and ELSS funds based on your investment objective, risk appetite and time horizon. Mid cap mutual funds can offer the potential for higher returns but also carry higher volatility compared to large cap funds.

However, they also tend to be more volatile compared to large cap funds. Here are some tips on how to choose the best mid cap mutual funds in India:

First, look at the fund's performance over the long term such as 5 or 10 years rather than short term returns. A consistent track record indicates the fund manager's stock picking capabilities across market cycles. Second, analyse the portfolio. The fund should be diversified across various sectors and companies. This reduces the risk and limits the impact if a particular investment falters. The top 10 holdings should not exceed 25-30% of the portfolio. Third, choose a fund with a low expense ratio. This is the annual fee charged by the asset management company for managing the fund. A lower expense ratio means more of your money is invested rather than going towards fees.

Next, consider the fund manager's experience and expertise in the mid cap space. An experienced manager with over 10 years specifically in mid caps is ideal. See their educational qualifications and look for outperformance of their benchmark index. Fifth, choose a mid cap fund with a robust research team to analyse companies. Funds that have performed well usually have a disciplined stock selection process based on in-depth research.

Sixth, understand the investment style and philosophy of the fund. Some may be focused on growth companies while others value. This should align with your own investment goals and risk tolerance. Seventh, invest in a mid cap fund that holds a reasonably concentrated portfolio. Having too many stocks tends to dilute returns. However, holding too few stocks increases company-specific risks. Finally, do not make short term bets on mid cap funds. Invest only if you have a long term investment horizon of at least 5 years

[elitewealth2020]

Helios Mutual Fund is coming up with Helios Flexi Cap Fund, an NFO scheme with the objective of generating long-term capital appreciation by investing predominantly in equity & and equity-related instruments across market capitalization. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved. The scheme opens on the 23rd of October, 2023, and closes on the 6th of November, 2023. More Information Visit a website: https://elitewealth.in/helios-flexi-cap-fund-nfo-details/

[investmenttips4]

What are the advantages of investing in small-cap mutual funds compared to large-cap funds?

Investing in small-cap mutual funds offers several potential advantages compared to large-cap funds. Here are some key benefits:

Higher Growth Potential: Small-cap companies are often in the early stages of their growth cycle and have more room for expansion and significant revenue increases. As these companies grow, their stock prices can appreciate rapidly, providing substantial returns to investors.

Market Inefficiencies: Small-cap stocks are less analyzed and followed by market analysts compared to large-cap stocks. This can lead to pricing inefficiencies, allowing skilled fund managers to identify undervalued stocks and capitalize on these opportunities.

Diversification Benefits: Including small-cap funds in an investment portfolio can enhance diversification. Small-cap stocks tend to have different performance cycles compared to large-cap stocks, potentially reducing overall portfolio risk when combined with large-cap investments.

Higher Alpha Generation: Due to the potential for significant undervaluation and less market coverage, small-cap mutual funds may have a higher capacity to generate alpha (returns above the market average) compared to large-cap funds, particularly in bullish market conditions.

Entrepreneurial Spirit: Small-cap companies often have innovative business models and operate in niche markets. Investing in these companies can provide exposure to new and emerging industries, which can be rewarding if these industries experience rapid growth.

Long-Term Outperformance: Historically, small-cap stocks have outperformed large-cap stocks over the long term, despite higher volatility. Investors with a longer investment horizon may benefit from this trend, assuming they can tolerate short-term market fluctuations.

However, it's important to note that investing in small-cap mutual funds also comes with higher risks:

Higher Volatility: Small-cap stocks tend to be more volatile than large-cap stocks. Their prices can fluctuate more dramatically due to lower trading volumes and sensitivity to economic changes.

Liquidity Risks: Small-cap stocks may have lower liquidity, making it harder to buy or sell shares without impacting the stock price.

Business Risk: Small-cap companies might have less stable earnings, less diversified product lines, and greater exposure to market downturns.

Investors should consider their risk tolerance, investment needs, and time horizon before investing in small-cap mutual funds. Diversifying across different asset classes and sectors can help mitigate some of the risks associated with small-cap investments.

[zfunds]

Best Small Cap Mutual Funds to Grow your Money Fast

A common dilemma that many mutual fund investors face during their investment journey is picking out the best MF schemes. So many options are available that one can easily be left spoiled for choice. However, general rules of thumb can help you zero in on the right scheme. For instance,  if you are seeking growth, and can digest a tad extra volatility, then small-cap mutual fund investments are the perfect pick. These mutual funds primarily invest in companies with a market capitalization of less than INR 5000 crores for their immense potential to provide massive returns to investors. Let us check out the best small cap mutual funds for investments. 

Quant Small Cap Fund

With annualized returns of over 46 percent in the past three years, Quant Small Cap Regular Fund is one of the best-performing mutual funds in this category. The five biggest holdings of this fund include ITC, RBL Bank, Punjab National Bank, Jindal Stainless, and IRB Infrastructure Developers. It also has significant holdings in  Bikaji Foods International Ltd, HFCL, and India Cements. 

Canara Robeco Small Cap Fund

Canara Robeco Small Cap Regular Fund has one of the lowest expense ratios in the category at 2.06 percent, making it one of the best small cap mutual funds in India. City Union Bank, KEI Industries, Cera Sanitaryware, Multi Commodity Exchange Of India, and Ultratech Cement are its top five holdings. 

Axis Small Cap Fund

Axis Bank is amongst the most respected and sought-after banking institutions in India, and its mutual fund vertical is no different. Axis Small Cap Regular Fund scheme has helped investors earn over 21 percent annual returns over the past three years, and around 18 percent CAGR over the last five years. The scheme also has a low expense ratio of 1.92 percent, which makes it more attractive for investors.  

Kotak Small Cap Fund 

Another good option for people looking to make small cap mutual funds investments is Kotak Small Cap Regular Fund. With an expense ratio of 1.90 percent, the fund has grown investor funds at a CAGR of more than 26 percent in the past three years. Carborundum Universal, Ratnamani Metals & Tubes, and Century Plyboards India are amongst its biggest holdings. 

ICICI Prudential Small Cap Fund

ICICI Prudential Small Cap Regular Fund is another renowned mutual fund scheme in the category. The scheme has given almost 25 percent annual returns in the past three years, helping investors gain massive returns on their investments. The fund has invested three to four percent of its corpus in INOX Leisure, Cyient, Rolex Rings Private, Multi Commodity Exchange Of India, CCL Products (India), and KEI Industries. 

Want to earn unparalleled returns on your mutual fund investments? Then visit ZFunds now to invest in the most popular small cap funds in 2023. It is one of the fastest-growing online mutual fund investment platforms in India. Our mutual fund advisors help you pick the best mutual funds for the highest returns with the lowest risks possible. Download the app now to start investing.

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अपना निवेश पोर्टफोलियो कैसे बनायें? किस चीज़ का ध्यान जरुरी| रिस्क,लक्ष्य...

[personalfn-blog]

Wish To Invest In Small Cap Mutual Funds? Read This!

XYZ is a great mutual fund scheme. It has delivered 35% returns in one year" “It is a 5-star rated fund with supernormal returns over the past year” These are phrases that are often used by commission-driven distributors to lure gullible investors. Sadly, investors blindly trust the superficial facts, without probing deeper. Over the past year, small-caps have generated a return in excess of 30%. Mid-caps and multi-cap funds trailed behind with a return of around 25%. Large-caps, known for their steady returns, delivered about 20% over the year. It is human tendency to trust products that have delivered spectacular past returns. Several studies in international markets have found sufficient evidence to conclude that retail investors often chase returns. This is why top performing schemes or even top-rated schemes of the past three to five years attract strong investor inflows. Due to this, assets of top performing schemes have more than doubled over the past 12 months. All it takes is that push distributors give, for investors to confidently put in more money, ignoring the underlying risks. In the small-cap category, burgeoning fund size fuels a liquidity risk. Small-cap stocks, due to their size, usually have a low trading volume. Due to the risks associated which such stocks, buyers often disappear in an unforeseen event. In such a situation, the fund manager may end up holding an illiquid stock or may have to sell the stock at a deep discount. At the end of it, your investment in the fund will take a beating. Certain fund houses have well understood this risk. To deal with it, certain mid-and small-cap schemes have restricted fresh investments. Fund houses such as DSP BlackRock Mutual Fund, Mirae Asset Mutual Fund, and SBI Mutual Fund have restricted inflows into their small-and mid-cap oriented schemes given the high valuations and liquidity risk. In most cases, lumpsum investments have been disallowed, while allowing investments only through Systematic Investment Plans (SIPs). To deal with the liquidity risk, other schemes are gradually shifting from mid-and small-caps to large-caps.

Thus, mid-and small-cap funds have the tendency to go from thrilling highs to dangerous lows. Funds that solely invest in small-cap stocks will incur higher risk. Investors need to be wary of the high volatility.

When considering other category of funds, you will notice that though large-caps are positioned well to deal with the market downside, the upside is limited. Hence, investors can expect stable and decent returns over the long term. On the other hand, multi-caps, which invest across market-caps, give the best of both worlds – The high-return potential of mid-caps and stability of large-caps. The return generated by the category falls in between large-cap funds and mid-cap funds. When investing in mutual funds, it is best to diversify your portfolio across market-caps and investment styles. Hence, though small-cap funds are risky, they should be a part of your portfolio in order to boost long-term returns — provided the funds conform to your risk profile and investment goals. But, before you invest in small-cap funds, you need to exercise due diligence. With over a decade of experience in fund research, PersonalFN has outlined important factors you need to look at before adding a small-cap fund to your portfolio.

Past Performance Do not rely on the recent performance of a small-cap fund or any mutual fund for that matter. You need to dig deeper and look at the long-term returns generated by the fund. Compare the returns of the fund with its benchmark and other peers across periods and market cycles. If the fund has consistently performed well across all market conditions and time periods, you may shortlist the fund for investment.

Risk-adjusted Returns There is no doubt that small-cap funds are risky. However, some funds are capable of managing risk better than other schemes. Hence, you simply should not ignore schemes that generate superior risk adjusted returns. By doing this, you may gain from the potential to generate solid returns with lower volatility when compared to similar schemes.

Portfolio Construction You may want to avoid schemes where the exposure is skewed to the top holdings. This concentration adds risk to already risky small-cap fund.  Choose funds that maintain an allocation of under-5% to each stock or where the weightage of the top 10 holdings does not exceed 50% of the total portfolio. You may also want to avoid funds that have an unproportioned exposure to large-cap stocks. Exposure to large-caps does help in adding stability and improving liquidity of the portfolio, but excessive weightage to large-caps could create a drag on returns when the market is trending up. Consider funds that maintain a proper balance.

Fund Manager Experience The experience of the fund manager plays a crucial role in the performance of small-cap funds. Unlike large-cap stocks that are well-researched and offer better corporate governance, small-caps may not always be sincere in their disclosures. It takes the experience of a fund manager to judge management quality and look beyond the numbers being reported. Although at times corporate frauds are well camouflaged, due diligence is necessary. It will be sensible to stay with a fund manager having extensive experience and a dependable performance track record.

Fund House Quality Investing in fund houses with multi-national names or those that are well-known in banking or insurance or other fields are not necessarily the best in mutual fund management. You need to pick schemes from a fund house with well-defined investment processes and risk management techniques. You can assess this by exploring how other equity schemes of the fund house have performed. If most of the schemes have generated a benchmark-beating performance across market periods, it is a sign that the fund house has put in place sound investment and risk management strategies. Thus, even if a star fund manager quits, it is likely that the fund may continue its stellar performance as the fund house follows a centralised management process.

An investor needs to prudently select the right mutual fund schemes keeping in mind the above points. This should be combined with factors like age, risk tolerance, investment horizon, investment objective, financial goals, and so on. It is difficult to predict when the market will favour large-cap or mid-cap, and small-cap stocks. So, as highlighted earlier, it will be prudent to include a mix of different categories of fund strategically in your portfolio. Given the current high valuations in the small-cap and mid-cap space, these funds may run into high volatility. An investor looking for lesser volatility or relatively stable returns can consider investing in large-cap funds or balanced funds. Those who are unsure about which mutual fund schemes to invest in may try PersonalFN’s unbiased mutual fund research services. Along with quantitative parameters such as performance, PersonalFN also considers qualitative parameters such as portfolio characteristics, fund manager experience, and fund house quality while analysing mutual fund schemes. We strongly suggest you subscribe to FundSelect Plus and benefit from the SEVEN time-tested, readymade equity and debt mutual fund portfolios. Based on your risk profile and investment horizon, you can choose out of three equity portfolios (Aggressive, Moderate and Conservative) and three debt portfolios. In addition, you get a readymade tax-saving portfolio as well. Don’t miss out… Subscribe Now!

This post on " Wish To Invest In Small Cap Mutual Funds? Read This! " appeared first on "PersonalFN"

[elitewealth2020]

Mahindra Manulife Small Cap Fund NFO opens for subscription on 21st November 2022. Mahindra Manulife Small Cap Fund Scheme is to generate long-term capital appreciation by investing in a diversified portfolio of equity & equity-related securities of small-cap companies, However, there can be no affirmation that the venture objective of the Plan will be accomplished.  Many investors believe that a Small Cap Fund itself can act like a diversified portfolio. More Information Visit a website:https://elitewealth.in/mahindra-manulife-small-cap-fund-nfo/

[gyanvedainvestment]

स्वतःचा गुंतवणूक पोर्टफोलिओ कसा तयार करावा? पूर्ण माहिती,जोखीम,ऑलोकेशन, ...

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How To Build Your Own Investment Portfolio? Factors, Risk, Allocation, S...

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छोटे शेयर्स से बड़ा धमाका करनेवाले सबसे बढ़िया ३ स्मॉल कैप म्युचुअल फण्ड. ...

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रॉकेट रिटर्नसाठी सर्वोत्तम ३ स्मॉल कॅप म्युच्युअल फंड. छोटे शेयर्स मोठा ...

[gyanvedainvestment]

Ultimate Best Top 3 Small Cap Mutual Funds 2021 For Rocket Growth. Never...

[personalfn-blog]

Wish To Invest In Small Cap Mutual Funds? Read This!

"XYZ is a great mutual fund scheme. It has delivered 35% returns in one year" “It is a 5-star rated fund with supernormal returns over the past year” These are phrases that are often used by commission-driven distributors to lure gullible investors. Sadly, investors blindly trust the superficial facts, without probing deeper. Over the past year, small-caps have generated a return in excess of 30%. Mid-caps and multi-cap funds trailed behind with a return of around 25%. Large-caps, known for their steady returns, delivered about 20% over the year. It is human tendency to trust products that have delivered spectacular past returns. Several studies in international markets have found sufficient evidence to conclude that retail investors often chase returns. This is why top performing schemes or even top-rated schemes of the past three to five years attract strong investor inflows. Due to this, assets of top performing schemes have more than doubled over the past 12 months. All it takes is that push distributors give, for investors to confidently put in more money, ignoring the underlying risks. In the small-cap category, burgeoning fund size fuels a liquidity risk. Small-cap stocks, due to their size, usually have a low trading volume. Due to the risks associated which such stocks, buyers often disappear in an unforeseen event. In such a situation, the fund manager may end up holding an illiquid stock or may have to sell the stock at a deep discount. At the end of it, your investment in the fund will take a beating. Certain fund houses have well understood this risk. To deal with it, certain mid-and small-cap schemes have restricted fresh investments. Fund houses such as DSP BlackRock Mutual Fund, Mirae Asset Mutual Fund, and SBI Mutual Fund have restricted inflows into their small-and mid-cap oriented schemes given the high valuations and liquidity risk. In most cases, lumpsum investments have been disallowed, while allowing investments only through Systematic Investment Plans (SIPs). To deal with the liquidity risk, other schemes are gradually shifting from mid-and small-caps to large-caps.

As seen in the table above, mid-and small-cap funds substantially outpaced other categories in a market rally. Unfortunately, when the market tanked, this fund category suffered heavy losses. With an exception when the market corrected between March 2015 and February 2016.

Thus, mid-and small-cap funds have the tendency to go from thrilling highs to dangerous lows. Funds that solely invest in small-cap stocks will incur higher risk. Investors need to be wary of the high volatility. When considering other category of funds, you will notice that though large-caps are positioned well to deal with the market downside, the upside is limited. Hence, investors can expect stable and decent returns over the long term. On the other hand, multi-caps, which invest across market-caps, give the best of both worlds – The high-return potential of mid-caps and stability of large-caps. The return generated by the category falls in between large-cap funds and mid-cap funds. When investing in mutual funds, it is best to diversify your portfolio across market-caps and investment styles. Hence, though small-cap funds are risky, they should be a part of your portfolio in order to boost long-term returns — provided the funds conform to your risk profile and investment goals. But, before you invest in small-cap funds, you need to exercise due diligence. With over a decade of experience in fund research, PersonalFN has outlined important factors you need to look at before adding a small-cap fund to your portfolio.

Past Performance Do not rely on the recent performance of a small-cap fund or any mutual fund for that matter. You need to dig deeper and look at the long-term returns generated by the fund. Compare the returns of the fund with its benchmark and other peers across periods and market cycles. If the fund has consistently performed well across all market conditions and time periods, you may shortlist the fund for investment.

Risk-adjusted Returns There is no doubt that small-cap funds are risky. However, some funds are capable of managing risk better than other schemes. Hence, you simply should not ignore schemes that generate superior risk adjusted returns. By doing this, you may gain from the potential to generate solid returns with lower volatility when compared to similar schemes.

Portfolio Construction You may want to avoid schemes where the exposure is skewed to the top holdings. This concentration adds risk to already risky small-cap fund.  Choose funds that maintain an allocation of under-5% to each stock or where the weightage of the top 10 holdings does not exceed 50% of the total portfolio. You may also want to avoid funds that have an unproportioned exposure to large-cap stocks. Exposure to large-caps does help in adding stability and improving liquidity of the portfolio, but excessive weightage to large-caps could create a drag on returns when the market is trending up. Consider funds that maintain a proper balance.

Fund Manager Experience The experience of the fund manager plays a crucial role in the performance of small-cap funds. Unlike large-cap stocks that are well-researched and offer better corporate governance, small-caps may not always be sincere in their disclosures. It takes the experience of a fund manager to judge management quality and look beyond the numbers being reported. Although at times corporate frauds are well camouflaged, due diligence is necessary. It will be sensible to stay with a fund manager having extensive experience and a dependable performance track record.

Fund House Quality Investing in fund houses with multi-national names or those that are well-known in banking or insurance or other fields are not necessarily the best in mutual fund management. You need to pick schemes from a fund house with well-defined investment processes and risk management techniques. You can assess this by exploring how other equity schemes of the fund house have performed. If most of the schemes have generated a benchmark-beating performance across market periods, it is a sign that the fund house has put in place sound investment and risk management strategies. Thus, even if a star fund manager quits, it is likely that the fund may continue its stellar performance as the fund house follows a centralised management process.

An investor needs to prudently select the right mutual fund schemes keeping in mind the above points. This should be combined with factors like age, risk tolerance, investment horizon, investment objective, financial goals, and so on. It is difficult to predict when the market will favour large-cap or mid-cap, and small-cap stocks. So, as highlighted earlier, it will be prudent to include a mix of different categories of fund strategically in your portfolio. Given the current high valuations in the small-cap and mid-cap space, these funds may run into high volatility. An investor looking for lesser volatility or relatively stable returns can consider investing in large-cap funds or balanced funds. Those who are unsure about which mutual fund schemes to invest in may try PersonalFN’s unbiased mutual fund research services. Along with quantitative parameters such as performance, PersonalFN also considers qualitative parameters such as portfolio characteristics, fund manager experience, and fund house quality while analysing mutual fund schemes. We strongly suggest you subscribe to FundSelect Plus and benefit from the SEVEN time-tested, readymade equity and debt mutual fund portfolios. Based on your risk profile and investment horizon, you can choose out of three equity portfolios (Aggressive, Moderate and Conservative) and three debt portfolios. In addition, you get a readymade tax-saving portfolio as well. Don’t miss out… Subscribe Now!

This article first appeared on PersonalFN here.

https://www.personalfn.com/fns/invest-in-small-cap-mutual-funds