Synopsis
Apart from SBI Small Cap Fund, two more small cap schemes have made it to the top 5 performers in 10 years. Nippon Ind Small Cap Fund and DSP Small Cap Fund have both offered more returns than most equity and hybrid schemes in the last 10 years.
iStockSmall cap funds have the potential to offer superior returns and beat other equity categories in the long term, experts claim. But do they? Well, at least one small cap scheme did. SBI Small Cap Fund is the topper on return charts in the 10 year period, not just in its own category, but in all equity categories. Let’s see how the scheme managed to achieve this feat.
Apart from SBI Small Cap Fund, two more small cap schemes have made it to the top 5 performers in 10 years. Nippon Ind Small Cap Fund and DSP Small Cap Fund have both offered more returns than most equity and hybrid schemes in the last 10 years.
With 24.72% returns in 10 years, SBI Small Cap is ahead of all the schemes in all equity, debt and hybrid categories. We have considered only schemes that have been around for 10 years. The scheme manages an AUM worth Rs 11,646 crore and has offered 19.58% returns since its inception. The scheme has also done well in other time frames. Take a look:
| Returns (%) | 1-year | 3-year | 5-year | 10-year |
| SBI Small Cap Fund | 5.09 | 25.32 | 16.82 | 24.72 |
| Benchmark | -3.95 | 19.05 | 7.66 | 11.93 |
| Small cap category | 0.97 | 24.92 | 11.74 | 18.52 |
Source: Value Research
Apart from trailing returns, the scheme has also shown great performance on an annual basis since its launch. The scheme has outperformed its benchmark most of the times since inception but has also managed the downside better than the average small cap category. The fund has been managed by R Srinivasan since 2013.
The fund has 40-50 stocks at all times, which is a fairly focused approach in the small cap segment. Fund managers usually diversify more in the small cap segment because of liquidity issues.
“SBI Small Cap Fund is a well managed fund in the small cap space with a proven long term track record. It's also backed by an experienced fund manager R Srinivasan, who is also the Head of Equity at SBI MF. However, the large fund size is a concern. They run a reasonably focused portfolio with a bias for quality. The track record of the fund is a testament for strong bottom up stock picking skills of the fund manager,” says Arun Kumar, head of research, Funds India.
ET OnlineSource: Value Research
The fund has high allocation to consumer discretionary stocks and capital goods at the moment. These calls are contrary to the average allocation of the small cap category. The fund has also cut its allocation to technology sector stocks vis-a-vis the category average.
ET OnlineSource: Value Research
In February, 2021, SBI Mutual Fund capped the inflows at Rs 25,000 per month for SIP / STP in SBI Small Cap Fund. The limits for various frequencies are: Daily SIP / STP: Rs 1,250, weekly SIP / STP: Rs 6,250, monthly SIP / STP: Rs 25,000, quarterly SIP / STP: Rs 75,000. According to Arun Kumar, the growing size of the fund can be a concern in the future.
“SBI Small Cap Fund follows a growth oriented strategy, this strategy has played out extremely well for the fund. Along with the fact that the fund manager is highly experienced and seasoned, his stock selection, sectoral bets and allocation towards these stocks and sectors have been quite different from the category and this has played out extremely well towards the fund's performance. Also, the fund's portfolio turnover ratio has been very low which indicates his stocks picks, conviction, analysis and buy & hold strategy has played out very well as well,” says Rushabh Desai, Founder, Rupee with Rushabh Investment Services, based in Mumbai.
Tuesday, 28 Mar, 2023
Experience Your Economic Times Newspaper, The Digital Way!
- Front Page
- Pure Politics
- Companies
- Economy
- More
‘Banks Must Hear Borrower before Tagging as Fraud’- SCIn a setback to lenders, the Supreme Court on Monday ruled that banks are bound to give borrowers a personal hearing opportunity before classifying accounts as fraudulent.
SC Dismisses DRI Plea Against CESTAT Orders on Adani CosThe Supreme Court on Monday dismissed the petition filed by the Directorate of Revenue Intelligence (DRI) challenging the orders issued last year by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to quash the cases pertaining to over-invoicing allegations levelled by the agency against three Adani Group subsidiaries.
AMCs Reopen International Plans to InvestorsDomestic mutual fund houses have resumed accepting lump-sum contributions to their international equity plans after the latest Finance Bill removed tax advantages for debt-oriented saving plans from April 1. Onshore plans that invest in overseas markets are treated as debt funds locally for taxation purposes.
Read More News on
(Catch all the latest news about mutual funds, MF insights & analysis, best buys and investment trends on ETMutualFunds.com)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
ETPrime stories of the day
3 mins read | 10 mins read | 9 mins read |
