Small-cap mutual funds are typically defined as companies with a market capitalization of less than $5 billion. Small-cap stocks tend to have higher growth potential than large-cap stocks but also come with a higher level of risk.
Because small-cap funds are riskier, they may be better for investors who can handle more risk and have a longer time horizon. Every person wants wealth and security at the same time. For long-term purposes, small-cap mutual funds are best to invest in.
In this blog, we will learn about the top 5 best small-cap mutual funds that have a high growth potential and have been around for a long time.
Top 5 best small-cap mutual funds for a long time.
Here are some of the top 5 best small-cap mutual funds for a long time:
Kotak Small Cap Fund: Kotak small cap fund comes in the top 5 best small-cap mutual funds for a long time because of higher growth and its objective is to generate long-term capital appreciation by investing in a diversified portfolio of small-cap stocks. The mutual fund is managed by Kotak Mahindra Asset Management Company Limited. It invests primarily in small-cap stocks.
Some possible long-term benefits of putting money into the Kotak Small Cap Fund are:
- Professional management: The fund is managed by professional fund managers at Kotak Mahindra Asset Management Company Limited, who conduct research and make investment decisions on behalf of the fund’s shareholders.
- Liquidity: Kotak Small Cap Fund is a publicly traded mutual fund, which means that shares can be bought and sold on the stock exchange during market hours.
- Tax benefit: Equity-oriented funds are taxed at a lower rate, so the Kotak Small Cap Fund may be a tax-efficient investment option for investors in the higher tax bracket.
- Flexibility: The Kotak Small Cap Fund allows investors to invest in a broad range of small-cap companies, providing a higher degree of flexibility to the investors.
Franklin India Smaller Companies Fund: Franklin small-cap mutual fund offered by Franklin Templeton India. The fund’s objective is to provide long-term capital appreciation by investing in a diversified portfolio of smaller companies that have the potential for high growth. The fund’s portfolio typically includes companies with a market capitalization less than that of companies included in the BSE 500 index. This is the main reason this fund comes in the top 5 best small-cap mutual funds for a long time.
Some potential benefits of investing in a Franklin small-cap mutual fund include:
- Diversification: By investing in a mix of smaller companies, the fund can provide diversification to your portfolio and the potential for higher returns.
- Professional management: The fund is professionally managed by experienced fund managers who have in-depth knowledge of the small-cap segment and its underlying companies.
- Strong historical performance: The fund has been consistently delivering strong returns over the long-term, long term has been in existence since 1994, with a consistent track record of performance.
- Risk Management: The fund’s portfolio includes diversification across sectors and companies, which can help to manage risk and reduce the impact of any individual company’s performance on the fund’s overall returns.
Nippon India Small Cap Fund: Nippon small-cap mutual fund has a relatively high-risk profile and is suitable for investors with a high-risk tolerance and a long-term investment horizon. As small-cap stocks are generally more volatile than large-cap stocks, This is the reason people are more interested in Nippon because it comes under the top 5 best small-cap mutual funds for a long time according to multiple professional investors.
Some possible long-term benefits of putting money into the Nippon India Small Cap Fund are:
- Diversification: The fund invests in a diversified portfolio of small-cap stocks, which can reduce the overall risk of the portfolio.
- Professional management: The fund is managed by professional fund managers at Nippon India Mutual Fund, who conduct research and make investment decisions on behalf of the fund’s shareholders.
- Liquidity and publicly traded: Nippon India Small Cap Fund is a publicly traded mutual fund, which means that shares can be bought and sold on the stock exchange during market hours.
- Tax benefit: Equity-oriented funds are taxed at a lower rate, so the Nippon India Small Cap Fund may be a tax-efficient investment option for investors in the higher tax bracket.
- Flexibility: The Nippon India Small Cap Fund allows investors to invest in a broad range of small-cap companies, providing a higher degree of flexibility to the investors.
Quant Small Cap mutual fund: It is managed by Quant Mutual Fund. The fund’s objective is to generate long-term capital by investing in a diversified portfolio that’s why it invests primarily in small-cap stocks that have the potential for high growth and good financial performance.
The Quant Small Cap Fund is a small-cap mutual fund offered by Quant Mutual Fund.
Some potential benefits of investing in this fund for the long term include:
- Potential for higher returns: Small-cap companies have the potential for higher returns compared to larger, more established companies. This can lead to higher returns for investors over the long term.
- Diversification: By investing in a mix of smaller companies, the fund can provide diversification to your portfolio and help to reduce overall portfolio risk.
- Professional Experts team: The fund is professionally managed by experienced fund managers who have in-depth knowledge of the small-cap segment and its underlying companies.
- Strong historical performance: The fund has been consistently delivering strong returns over the long term, as it has been in existence since 2013, with a consistent track record of performance.
- Risk Analysis: The fund’s portfolio is diversified across sectors and companies, which can help to manage risk and reduce the impact of any individual company’s performance on the fund’s overall returns.
Canara Robeco Small Cap Fund: it is a small-cap mutual fund offered by Canara Robeco Mutual Fund. The funds have a high potential to grow for the long term that’s why it is in the top 5 best small-cap mutual funds for a long time. The fund’s portfolio typically includes companies with a market capitalization less than that of companies included in the Nifty Small cap index.
They use a bottom-up stock-picking approach and focus on companies that have strong fundamentals and the potential for high growth.
Benefits of investing in the Canara Robeco small cap fund for the long term include:
- Bottom-up approach: The fund managers use a bottom-up stock picking approach, which means they focus on individual companies and their fundamentals, rather than the overall market conditions. This approach can help to identify companies with strong growth potential that may be overlooked by other fund managers.
- Experienced fund managers: The fund is managed by experienced fund managers who have in-depth knowledge of the small-cap segment and its underlying companies. This can help to ensure that the fund’s portfolio is well-diversified and includes companies with strong fundamentals and potential for high growth.
- Strong historical performance: The fund has been consistently delivering strong returns over the long term, as it has been in existence since 2006, with a consistent track record of performance.
- Good risk management: The fund’s portfolio is diversified across sectors and companies, which can help to manage risk and reduce the impact of any individual company’s performance on the fund’s overall returns.
Conclusion:
Small Cap mutual funds provide diversification and the potential for higher returns compared to larger, more established companies.
These funds can also offer investors exposure to growth industries and niche markets that may not be represented in larger-cap funds. Hopefully this article will help you get an idea of the top 5 best small-cap mutual funds for a long time investment.