Hi everyone, I’m considering to invest in Small cap MF.
As per past History (5-10yrs returns, AUM, etc.) I’ve shortlisted a few:
- Nippon India small cap fund
- Quant small cap fund
Eagerly looking forward to your insights and POV.
Also, If you all have any further suggestions, I am open for the same. Thanks in anticipation.
Both are good. Here are some points you may want to know
As fund size increases, small cap Mutual funds find it increasingly difficult to maintain high concentrations in small caps due to liquidity issues (hampers their nimbleness). This means they will have to take up positions in Midcaps and Large caps as well. With increasding AUM, Nippon Small cap MF has over the years allocated more and more to mid caps. Infact now they are more into midcaps than smallcaps. A re-classification might be in order soon. This is fine if you prefer that style.
Axis Mutual Fund is good if you consider annual consistency. But again their size is big and are exposed more to mid caps now.
Quant Small Cap fund has much smaller AUM and maintain high concentrations in small caps.
Sips with 5 year view is fine anytime - but imo lumpsum in small cap funds should only be considered when the small cap index has fallen 20% + from its top.
Quant Small Caps top 3 holdings → RIL,HDFC, TREPS. I dont get how a small cap has something like that
Looks like a way to derisk.
De-risk yes sure but the whole point of investing in smallcap is to have exposure to high risk-high reward companies. This kind of defeats the purpose isnt it