Small-cap funds are equity mutual funds that invest in companies with a small market capitalization. Market capitalization refers to the total value of a company’s outstanding shares, calculated by multiplying the share price by the number of shares outstanding. Small-cap companies are typically defined as those with a market capitalization of less than Rs 5,000 crore in India. However, the Securities and Exchange Board of India (SEBI) has a ranking-based definition of small-cap funds.
As per the new definition, applicable from 2018, all stocks are indexed in descending order of market capitalization. The top 100 stocks are classified as large-cap stocks, the 101st to 250th stocks are classified as mid-cap stocks, and the stocks beyond the rank of 251 are classified as small-cap stocks. In addition, a Small-cap mutual fund must
Let’s deep dive into the world of Small-cap Mutual funds and know which fund has delivered the most over a month-on-month basis.
Monthly Returns – Small Cap Mutual funds with highest returns (Growth SmallCap Fund – GSFC)
| Sr. No. | Scheme Name | Plan | AUM (Rs. Crore) |
Crisil Rank | MTD | Sep-23 | Aug-23 | Jul-23 | Jun-23 |
| 1 | Bandhan Emerging Businesses Fund – GSCF | Direct | 2,161.34 | 2 | 2.25% | 3.38% | 5.41% | 6.34% | 6.65% |
| 2 | Bandhan Emerging Businesses Fund – GSCF | Regular | 2,161.34 | 2 | 2.20% | 3.26% | 5.28% | 6.21% | 6.53% |
| 3 | ITI Small Cap Fund – GSCF | Direct | 1649.72 | 1 | 1.99% | 2.79% | 2.85% | 5.25% | 5.58% |
| 4 | Bank of India Small Cap Fund – GSCF | Direct | 684.80 | 3 | 3.12% | 2.71% | 4.33% | 5.26% | 5.48% |
| 5 | ITI Small Cap Fund – GSCF | Regular | 1,649.72 | 1 | 1.93% | 2.65% | 2.70% | 5.10% | 5.43% |
| 6 | Bank of India Small Cap Fund – GSCF | Regular | 684.80 | 3 | 3.10% | 2.57% | 4.21% | 5.09% | 5.40% |
| 7 | Sundaram Small Cap Fund – GSCF | Direct | 2,652.72 | 3 | 1.71% | 2.21% | 4.04% | 4.80% | 5.02% |
| 8 | Sundaram Small Cap Fund – GSCF | Regular | 2,652.72 | 3 | 1.67% | 2.13% | 3.94% | 4.70% | 4.92% |
| 9 | ICICI Prudential Smallcap Index Fund – GSCF | Direct | 6,054.27 | N/A | 1.59% | 1.75% | 4.96% | 7.69% | 5.43% |
| 10 | ICICI Prudential Smallcap Index Fund – GSCF | Regular | 6,054.27 | N/A | 1.56% | 1.70% | 4.90% | 7.63% | 5.37% |
| 11 | PGIM India Small Cap Fund – GSCF | Direct | 1,709.08 | N/A | 0.63% | 1.68% | 1.05% | 5.02% | 4.63% |
| 12 | Mahindra Manulife Small Cap Fund – GSCF | Direct | 2,150.22 | N/A | 2.25% | 1.25% | 5.85% | 7.32% | 5.77% |
| 13 | Canara Robeco Small Cap Fund -GSCF | Direct | 7821.22 | 3 | 1.25% | 1.08% | 3.11% | 4.55% | 5.26% |
| 14 | LIC MF Small Cap Fund – GSCF | Direct | 170.14 | 2 | 1.88% | 1.08% | 2.68% | 3.00% | 4.69% |
| 15 | LIC MF Small Cap Fund – GSCF | Regular | 170.14 | 3 | 1.84% | 1.01% | 2.60% | 2.89% | 4.61% |
Direct mutual funds are sold directly by the asset management company (AMC) or fund house. This means that there is no intermediary involved, such as a broker or distributor. As a result, direct mutual funds have a lower expense ratio, which is the percentage of a fund’s assets that are used to cover its operating expenses.
Regular mutual funds are sold through intermediaries, such as brokers, advisors, or distributors. These intermediaries charge the AMC a commission for selling their mutual funds, which is typically passed on to investors in the form of a higher expense ratio.
Here is a creative analogy to help you understand the difference between direct and regular mutual funds:
Small-cap funds are like investing in early-stage startups. They have the potential to grow into large and successful companies, but they also come with a higher risk of failure. If you are comfortable with the risk, then small-cap funds can be a great way to boost your investment returns.
However, it is important to remember that small-cap funds are not for everyone. They are best suited for investors with a long-term time horizon and a high-risk tolerance. If you are looking for a more conservative investment option, then you may want to consider investing in large-cap or mid-cap funds instead.
Disclaimer: This blog has been written exclusively for educational purposes and not a recommendation. It is based on several secondary sources on the internet and is subject to changes. Past performance does not guarantee future returns. Please consult an expert before making related decisions.
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