Is investing in SBI Small Cap profitable?
This fund belongs to SBI mutual funds and is an open-ended Small Cap equity scheme. It was launched by SBI on 9 September 2009. Its objective is to provide opportunities to investors for long-term growth in the capital with the liquidity of an open-ended scheme. You can invest in a properly diversified basket of equity stocks of Small-Cap companies. The investment in this fund comes in a very high-risk category according to SEBI’s latest guidelines.
For the last 1 year, SBI Small Cap fund regular growth is fantastic with good returns. The returns are close to 38% in the last year with strong momentum in the market. the extraordinary return has attracted many investors. It is also among the top performers in equity mutual funds. It is performing well in the case of long-term returns also. It has shown good performance across the market phases and cycles in the last few years. Talking specifically, on the annual basis for the last 7 years, the SBI Small Cap funds have generated a return of 27% per year. If it is calculated on an annualized basis in the last 10 years, then the generated returns have been around 20%. The major part of this fund’s regular growth is good returns which are due to the way the market is moving in the last few years. Currently, SBI Small Cap Fund has around 95% of the asset under management, which estimates at around Rs.6,628 crores. Also, there is an option of investing through the SIP route. This means a person can opt to invest small sums of money every month. It aims to provide investors with an opportunity for long-term growth in the capital with the liquidity of an open-ended scheme. Investors find various equity stocks of small-cap companies. The fund holds a minimum of 65% of its investment in equity & equity-related instruments.
The fund follows a blend of growth and value style of investing in a planned strategic way. The fund manager invests in the growth-oriented stock of small-sized companies but keeps a check on the price paid for the stock. It also hunts for temporarily down stocks available at cheap value and doesn’t resist taking a few short-term calls. The manager follows the bottom-up approach to stock-picking in choosing companies within the small-cap space.
The Fund is a well-managed scheme in the small-cap fund category. It has a proven track record of timely identifying fundamentally sound stocks in the small-cap space that have turned into multi-baggers.
If you know which fund gives the opportunity for long-term capital appreciation with the liquidity. Do read this topic- SBI Equity Hybrid equity Fund Regular Growth
From Hemant K Midha