Small cap mutual funds are best for those who want to start investing and also is best for those who like to invest in multiple portfolios and want to take calculated risks. For this, the size of the company is an important factor for selecting equity portfolios. The best small cap mutual funds invest in small companies which have a higher potential to grow in the future and also have the potential scope of growth. Here are some best small cap mutual funds to invest in this year by FinanceShed.
Franklin India smaller companies fund
Franklin India smaller company fund generated higher returns during the last 3 years. This company generated returns at 8.81% returns. This scheme outperformed during the last years in both the categories category average and its benchmark during and generated returns of 18.65%. This scheme is relatively conservative regarding its investment choices and has only 68% of its assets invested in small cap stocks but performed aggressive strategy during sector-wise allocation. This scheme has its top holdings in HDFC Bank, Vardhman Textiles and Cyient.
HDFC Small cap fund
HDFC small cap fund is one of the highest return providers during the last three to five years. This small cap fund provided huge returns of 16.07% during the past 3 year period. This returns nearly doubled its category average and around 11% more than its benchmark. This scheme also outperformed in its benchmark return. By generating a return of on an average 20.94% during the last five years. This scheme has its major investment in defensive sectors including Software and Entertainment than sectors like Banking in its portfolio. The scheme has around 71% of its investment in the small cap sector. The top company holdings here are Aurobindo Pharma, NIIT Technologies and Chambal Fertilizers & Chemicals. HDFC small cap fund is one of those few companies that generate higher returns both in the long run as well as short run.
Reliance Small cap fund
This small cap fund also outperformed in both its category and have generated returns of 13% in the last 3 years. Reliance small cap has also outperformed in its S&P 500 index funds. This scheme is a moderately aggressive small cap fund as it has given a weight of around 73% to small caps in its portfolio. In sector-wise allocation, this scheme has adopted an aggressive approach. Reliance Small Cap Fund is definitely a good small cap fund which is having the potential of providing a return in the long term as well as short term.
L&T Emerging business fund
L&T is one of the top performing players. This scheme provided its investors with magnificent returns of 16.10%. This scheme in the last three years has outperformed in it’s both the schemes and is relatively less aggressive compared to other small cap mutual funds and have a major part of its assets invested in small cap. The highest company holding of this scheme is Future Retail, IPCA Laboratories, and Sterlite Technologies.
There are various other companies that have its huge share in small cap mutual fund investing providing their investors with the highest growth and profit.