Small-cap funds have been doing exceedingly well. Take a look at the 1-year performance of the top 10 performers (Growth option, Direct plans).
Undoubtedly, these are very impressive returns. However, investors are committing the error of investing based on the latest numbers. If you are considering an investment in such a fund, please keep this in mind.
- Invest only if you have an investment horizon of at least 10 years.
- Small-cap funds can be great long-term wealth creators, but they come with increased volatility in the short term. Be prepared.
- Do not ignore the proper asset allocation and go overboard while investing in small-cap funds.
- Check the investment style of the fund manager.
While you can read our take on all funds here, below are the views on select funds by our research analysts.
DSP Small Cap Fund: Associate director of fund research Himanshu Srivastava analysed this fund in March 2023 and assigned a Silver Rating. Read the analyst note.
SBI Small Cap Fund: Senior analyst Kavitha Krishnan analysed this fund in December 2022 and assigned ratings of Neutral (Regular Plan) and Bronze (Direct Plan). Read the analyst note.
HDFC Small Cap Fund: Senior analyst Kavitha Krishnan analysed this fund in June 2022 and assigned ratings of Neutral (Regular Plan) and Bronze (Direct Plan). Read the analyst note.
Kotak Small Cap Fund: Senior analyst Kavitha Krishnan analysed this fund in February 2022 and then assigned ratings of Bronze (Regular Plan) and Silver (Direct Plan). That has now been replaced by the Morningstar Medalist Rating of Gold. Read the note.
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