The size of the company is treated as one of the vital factors that must be considered whilst structuring the equity portfolio (portfolio’s set of risks & opportunities will depend on the company size). The small cap mutual funds invest pre-dominantly in stocks of small companies that have some potential to grow. These stocks can either double or triple over a short time-period; this also implies that returns generated from these funds are subject to high-volatility.
If you are ready to take the risk & want to optimize your portfolio returns, then these funds are good go. Try to invest in the small portion of your portfolio in these funds for wealth accumulation.
Things to Consider whilst Investing in the best small cap mutual funds
Small cap mutual funds are subject to risks & as an investor, you must weigh in different components that get in the chance of affecting the fund performance. You must consider your risk tolerance, the objective of your investment, investment horizon, and age. The following points can be taken into the consideration as well. Here:
- Portfolio Construction: Take the best pick of small cap mutual funds that can balance your portfolio. Also, try to invest in funds, that in turn invest in small-cap stocks across different sectors. It is appropriate to avoid funds that pre-dominantly invest in a few stocks.
- Past Performance: Important note states that whilst picking out the funds, make sure to take consideration into their past performance. The present performance is a good thought, but past performance is mandatory. Try to get hold of the last 5 years & compare it with peer funds for clearance.
- Fund House: Don’t forget your research regarding the fund houses; take care of their history related to their benchmark performance in both criterion – highs & lows. A reliable fund house should have a remarkable investment process along with an expert research team, excellent coverage, and technique managing risk. If you are seeking further information regarding the sane, get in touch with Gulaq. The experts will advise you.
- Fund Manager: Try to seek the advice of an experienced fund manager as choosing the best small cap mutual funds. Make sure the fund manager has a good performance record.
- Know the Options: Its good to choose between reward and risk. Try to explore options that allow your small cap mutual funds must need flexibility to hold-on high cash/ or invest in the mid & large cap stocks.
Best Small Cap Mutual Funds
| Fund Name |
| Axis Small Cap Fund (G)- Direct Plan |
| SBI Small Cap Fund(G)- Direct Plan |
| HDFC Small Cap Fund(G)- Direct Plan |
| ICICI Pru Small Cap Fund(G)- Direct Plan |
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*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.