If you’re looking to gain competitive returns and willing to take some risks, you can consider investing in small-cap funds. In comparison to large-cap funds (14% CAGR) and mid-cap funds (19%), small-cap funds have produced a 21% CAGR (compounded annual growth rate) throughout the past decade. The Nippon India Small Cap Fund stands out for its focus on higher stocks and consistent performance.
In this article, we will cover everything you need to know about investing in Nippon India Small Cap Fund and why it is popular.
About Nippon India Small Cap Fund
Nippon India Small Cap Fund (NSF) ranks among the best small-cap funds out there. Since its introduction in 2010, it has produced 20.50% returns that are competitive.
With an AUM of Rs 4,31,308 Crores (from Jan 2024 to Mar 2024 QAAUM) and 243.16 Lakhs folios (as of 31st Mar 2024), this fund is quite popular among investors.
NSF has a buy-and-hold approach. In the 10-year and 5-year duration, this fund has given returns of 24.73% and 37.30%, respectively. For the short duration of 3 years and 1 year, the returns given by NSF are 31.50% and 49.11%.
Factors Contributing to Its Adoption by Investors
Here are factors contributing to the popularity of small cap mutual funds, specifically, Nippon India Small Cap Fund.
Growth Prospect of Small Cap Companies
There is a lot of room for development in small-cap companies because they are often still in the early phases of their growth cycle. If this opportunity materializes, investors in the Nippon India Small Cap Fund stand to benefit a lot.
Diversification
The Nippon India Small Cap Fund is a good way to diversify your portfolio by investing in small-cap firms. To minimise the portfolio’s total risk, consider investing in small-cap stocks instead of large-cap or mid-cap firms since they tend to have a lesser correlation. A more stable investment portfolio and higher returns are both possible outcomes of this diversification.
Expert Stock Selection
The investment team behind the fund scours the market for cheap small-cap firms that are poised for explosive development. Maximising returns for investors is possible with this systematic strategy, which aids in choosing equities that are set for substantial appreciation.
Proven Success in Managing Funds
The Nippon India Small Cap Fund’s management staff has extensive experience in the small-cap market, and the fund has a history of producing excellent returns. The fund has received several awards and honours for its continuous performance.
The persistent outperformance of the Nippon India Small Cap Fund’s rivals is evidence of the fund’s good management and sound investing approach.
Ease of Systematic Investment Plan (SIP)
By enabling investors to invest a defined amount consistently, the Nippon India Small Cap Fund provides a systematic investment plan (SIP), which helps to average out the purchase cost and reduces exposure to market volatility. The systematic nature of SIPs has contributed to their meteoric rise in popularity.
Highly Accessible
The Nippon India Mutual Fund is committed to being transparent and accessible by providing regular updates, reports on performance, and full details of the fund’s assets. This openness makes buyers more likely to trust and believe in the company.
Conclusion
Lots of investors have put money into the Nippon India Small Cap Fund because it focuses on small companies that have a lot of room to grow. It appeals to both new and experienced investors because it has a great track record, a skilled management team, and features that are designed with investors in mind.
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