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    SBI Small Cap Fund: Fund review

    Synopsis

    Historical data points out that when inflows in mutual funds rise after a period of stagnant inflows or outflows, a large part of the money finds its way in small cap funds.

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    Historical data points out that when inflows in mutual funds rise after a period of stagnant inflows or outflows, a large part of the money finds its way in small cap funds, the idea being that fund managers tend to spot fresh ideas in this universe. Investors who are willing to take a bit of risk and gain relatively better than the large-cap schemes in the long-term can consider investing in small cap schemes.

    Among small-cap schemes that have been in existence for over a decade, SBI Small Cap is a distinguished performer especially in the past five-year period, beating its peers by a considerable margin. In the past three-year and five-year periods, the scheme has delivered returns of 16.1% and 22.5% respectively, while its peers have given average returns of 10% and 15%, respectively over the same period.

    Presently, the scheme accepts investments only through systematic investment plan (SIP) or systematic transfer plan (STP). This reduces volatility and helps in constant rebalance of the portfolio. Midsized companies make up 14% of the scheme’s portfolio, while 4% is invested in large-sized companies. In terms of themes, the scheme’s fund manager is invested in companies that are expected to benefit from economic recovery and improvement in consumer discretionary sales. These themes tend to do well only in the long-term (minimum five years), a key reason being the fund manager’s stock selection approach is sector-specific rather than stock-specific.

    Things You should consider
    • Annualized Return
      for 3 year: 4.81%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 2.7 Years
    Things You should consider
    • Annualized Return
      for 3 year: -2.3%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 3.11 Years
    Portfolio change (past 6 months)
    New Entrants Complete Exits Increase in Allocation
    Agro Tech Foods Avanti Feeds V2 Retail
    BHEL Camlin Fine Sciences Relaxo Footwears
    Carborundum Universal ICICI Securities Kewal Kiran Clothing

    Returns (in %)
    Period CAGR return SIP CAGR return Market cap fund-
    Average CAGR return (%)

    1 Year -5.04 2.41 -10.17
    3 Year 16.13 7.94 9.54
    5 Year 22.57 14.87 13.26

    Returns peer comparison (in %)
    Scheme name 1-Year 3-Year 5-Year
    Axis Small Cap Fund 7.11 12.91 14.99
    Franklin India Smaller Companies Fund -9.54 8.17 14.80
    HDFC Small Cap Fund -7.26 16.51 15.49
    Source: Accord Fintech, Complied by ETIG Database

    Expert Take
    Rupesh Bhansali, head-mutual funds, GEPL Capital

    SBI Small Cap has performed consistently well in the past five years. Fund manager R Srinivasan has demonstrated good stock-picking ability which is reflected in the scheme’s performance. The portfolio is well-diversified with just 45 companies. For long-term investors willing to risk and believe in high risk-high return market wisdom, this scheme serves well.

    1 Comment on this Story

    Nagaraju Bommanahalli415 days ago
    Don''t invest most of the companies doing fraud business, most of the money collected from Banks NBFC equities mutual funds are pumped to fraud companies by taking huge bribe then those companies will become bankruptcy and common people will loose their money
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