Nippon India Small Cap Fund, the largest scheme in the small cap category based on assets managed, multiplied investors’ wealth by 12.06 times. In simple words, a lumpsum investment of Rs 1 lakh made in this fund would have now grown to Rs 12.06 lakh with a CAGR of 28.27% in a 10-year horizon. The scheme is benchmarked against Nifty Smallcap 250 – TRI. The benchmark offered 21.23% during the same time period.
SBI Small Cap Fund multiplied investments by 10.91 times with a CAGR of 26.98% in a 10-year horizon. The scheme is benchmarked against S&P BSE 250 Small Cap – TRI. The benchmark gave 19.74% in a 10-year period.Quant ELSS Tax Saver Fund multiplied investors’ wealth by 10.17 times with a CAGR of 26.10%. The scheme is benchmarked against NIFTY 500 – TRI that offered 16.81% in 10 years.
We considered equity categories such as large cap, mid cap, small cap, multi cap, large & mid cap, contra fund, value fund, flexi cap, focused fund, and ELSS funds. We only considered regular and growth options. We considered CAGR on lumpsum investment.
Note, the above exercise is not a recommendation. The purpose of the exercise was to find which equity schemes have multiplied investors in 10 years. One should not make investment or redemption decisions based on the above exercise. One should always consider risk appetite, investment horizon and goal before making investment decisions. Past performance of the scheme does not guarantee future performance.Small cap schemes invest in very small companies or their stocks and are extremely risky. The small cap segment can be extremely volatile in the short term, but they have the potential to offer very high returns over a long period. Small cap schemes are recommended only to aggressive investors with a high-risk appetite and long investment horizon, say, around seven to 10 years. ETMutualFunds do not recommend small cap schemes to new and inexperienced investors.ELSS or tax saving schemes help investors to save income tax under Section 80C of the IT Act. One can invest a maximum of Rs 1.5 lakh in a financial year and claim deductions on investments in a financial year. ELSS funds invest in stocks and carry high risk. These schemes have a mandatory lock-in period of three years. This helps investors, especially new and inexperienced ones, to learn about the nature of equity markets and the volatility associated with it.
If you are looking for recommendations, see:Best tax saving mutual funds or ELSS to invest in 2024
Best small cap mutual funds to invest in 2024
