The SBI Small Cap Fund (MUTF_IN: SBI_SMAL_CAP_MY8974) is a high-potential mutual fund that primarily invests in small-cap companies, providing investors with the opportunity for long-term capital growth. Small-cap stocks are companies ranked beyond the top 250 in terms of market capitalization, offering investors high-growth opportunities with inherent risks.
This article provides an in-depth look at the SBI Small Cap Fund’s key features, performance, risk factors, and why it could be a valuable part of your investment portfolio.
What is the SBI Small Cap Fund?
The SBI Small Cap Fund (MUTF_IN: SBI_SMAL_CAP_MY8974) is an open-ended equity scheme designed to capture the growth potential of small-cap stocks. Since its inception in 2009, it has delivered robust returns, becoming a favorite among high-risk investors looking for significant gains over a long-term horizon.
Key Features:
- Launch Date: September 2009
- Fund Manager: R. Srinivasan
- Minimum Investment: ₹5,000 for lump sum, ₹500 for SIP
- Expense Ratio: 1.58%
- Exit Load: 1% if redeemed within one year
- NAV: ₹184.97 (as of September 2024)
- AUM: ₹32,761 crore(SBI Mutual Fund)(Value Research)
Fund Performance
The SBI Small Cap Fund has consistently outperformed its benchmark, generating high returns for investors over multiple time frames:
- 1-year return: 36.52%
- 3-year CAGR: 24.07%
- 5-year CAGR: 30.60%
- Since inception: 21.47%(mint)(Value Research)
Comparison with Peers
Compared to similar funds, the SBI Small Cap Fund ranks highly in terms of performance:
- Nippon India Small Cap Fund: 31.91% (3-year CAGR)
- Axis Small Cap Fund: 30.08% (3-year CAGR)
- HDFC Small Cap Fund: 26.34% (3-year CAGR)
Asset Allocation
The fund focuses primarily on equities with some allocation to cash equivalents for liquidity:
- Equity Exposure: 93.31%
- Cash & Cash Equivalents: 6.69%(Value Research)
Top Holdings
- Kalpataru Projects International Ltd. – 3.77%
- Blue Star Ltd. – 3.68%
- GE T&D India Ltd. – 3.39%
- Finolex Industries Ltd. – 3.36%
- Whirlpool of India Ltd. – 2.84%(Value Research)
Risk and Volatility
The fund has a high-risk profile and is suitable for investors willing to take on significant volatility for potential high returns:
- Beta: 0.83
- Standard Deviation: 12.13%
- Sharpe Ratio: 1.41(mint)
Who Should Invest?
The SBI Small Cap Fund (MUTF_IN: SBI_SMAL_CAP_MY8974) is ideal for investors who:
- Have a long-term investment horizon (5-10 years).
- Want to diversify their portfolio by including small-cap companies.
Taxation
The fund is taxed as an equity fund:
- Short-Term Capital Gains (STCG): 15% if held for less than a year.
- Long-Term Capital Gains (LTCG): 10% for gains exceeding ₹1 lakh if held for more than a year(Value Research).
FAQs
1. What is the investment objective of SBI Small Cap Fund?
The fund seeks long-term capital growth through investments in small-cap stocks.
2. What is the minimum investment required?
The minimum lump-sum investment is ₹5,000, while the SIP option requires ₹500.
3. What is the fund’s exit load?
An exit load of 1% is applicable if units are redeemed within one year.
4. What is the expense ratio?
The expense ratio is 1.58%.
5. Is this fund suitable for short-term investors?
No, the fund is suited for long-term investors due to the volatility of small-cap stocks.
Conclusion
The SBI Small Cap Fund (MUTF_IN: SBI_SMAL_CAP_MY8974) is an attractive option for investors seeking high returns through exposure to small-cap companies. With its solid track record, robust management, and diversified portfolio, it remains one of the top-performing funds in the small-cap category. However, the high-risk profile means it is best suited for investors with a long-term horizon and a high-risk appetite.
By carefully evaluating your financial goals and risk tolerance, this fund could be a valuable addition to your investment portfolio.
