Which small-caps should I invest in?
Investing in systematic investment plans (SIP) is an excellent way to grow your wealth over the long term. Mutual funds (MFs) are an ideal avenue for small investors, and it can help you diversify your portfolio. It is always advisable to invest in small-cap funds for the long term. However, choosing the right small-cap funds can be daunting. In this article, we will discuss the best small-cap mutual funds that you can invest in to achieve your long-term financial goals.
1. SBI Small Cap Fund
SBI Small Cap Fund comes under the Equity: Small Cap category. This fund has a track record of outperforming its benchmark consistently. Its net asset value grew by 60% in the last three years. This fund invests in high-growth companies that are still in their early stages. The SBI Small Cap Fund are suitable for investors with an investment horizon of not less than five years.
2. HDFC Small Cap Fund
HDFC Small Cap Fund is another equity: small cap category fund. This small-cap fund has grown its net asset value by 69% in the last three years. This fund invests in a diversified portfolio of small-cap companies with market capitalization ranging between Rs 100 crores to Rs 5000 crores. This fund is best suited for investors with a high-risk appetite and a long-term horizon.
3. Axis Small Cap Fund
Axis Small Cap Fund belongs to the equity: smallcap category. It has a CAGR of 24.4% and has grown its net asset value by 77% in the last three years. This fund invests in high-quality small-cap companies with sustainable business models and a proven track record. It is best suited for investors looking for high growth and long-term investments.
4. Nippon India Small Cap Fund
Nippon India Small Cap Fund belongs to the Equity: Small Cap category. This fund invests in fast-growing small-cap companies with market capitalization ranging between Rs 50 crores to Rs 7000 crores. It is suitable for investors who are willing to take on higher risk for higher returns in the long term.
5. Kotak Small Cap Fund
Kotak Small Cap Fund belongs to the Equity: Small Cap category. This fund invests in a diversified portfolio of high-quality small-cap companies with a track record of consistent growth. The net asset value of the Kotak Small Cap Fund has grown by 67% in the last three years. This fund is best suited for investors with a long-term investment horizon.
Conclusion
Investing in small-cap funds is an excellent way to get high returns over the long term. These funds tend to outperform other categories of mutual funds due to the high growth potential of small companies. However, remember that investing in small-cap funds is risky, and investors should have a long-term horizon for their investments. We hope this article has helped you choose the right small-cap mutual fund to achieve your long-term financial goals.