Best Small Cap Mutual Fund for 2021 – Top Small Cap Fund
|Scheme name||1-Year Return||3-Year Return||5-Year Return||NAV||Expense Ratio||Turnover ratio|
|SBI Small Cap Fund Regular Growth||31.93%||8.33%||19.40%||Rs. 75.4648||1.92%||60.00%|
|Kotak Small Cap Fund - Growth||35.66%||10.70%||17.33%||Rs.108.153||2.11%||20.57%|
What are Best Small Cap Mutual Funds?Small Cap mutual funds invest in small cap companies. Small cap companies are 250th onwards in terms of market capitalisation. Small cap funds have the potential to deliver superior returns. But small cap funds are also incredibly volatile. They are riskier than large cap and mid cap funds. The Securities and Exchange Board of India, SEBI defines small cap mutual funds as ‘Funds that primarily invest in the companies which have a market capitalisation of less than 500 Crores’. As per SEBI, a small-cap mutual fund must invest 80% of its corpus in stocks of small-cap companies. The remaining 20% can be invested in large cap or midcap companies. While small cap funds generate superior returns, even the slightest volatility in the market can have a huge impact on the valuation of small cap companies.
What Are the Advantages of Investing in The Best Small Cap Funds?
- Small cap funds have extremely high growth potential.
- Small cap funds help in portfolio diversification.
- Small cap funds tend to outperform the large cap and mid cap funds in a bull run. It gives you an opportunity to grow your investments quickly and earn superior returns.