The HDFC Small Cap Fund is at the forefront of the developments in the Indian small-cap sector in 2024. Many investors have expressed interest in this fund because of its outstanding performance and great return history. It has been the preferred option for people trying to exploit growth opportunities.
For those interested in this industry, understanding how the HDFC Small Cap Mutual Fund and its rivals have been able to generate over 30% returns in 3 years is very important. Let’s review the key components and learn how they were able to generate such high returns.
About HDFC Small Cap Fund Details
Small-cap funds invest in companies with a market cap of less than ₹5,000 crore. These funds focus on companies with the potential for quick growth, which could result in substantial profits for investors.
Small companies are frequently more exposed to market changes and lack the stability that larger, more established businesses typically have. As a result, these funds carry a high level of risk and reward. HDFC Small Cap Fund follows the same philosophy. Here are the details about this fund.
- Current NAV: ₹122.36
- Expense Ratio: 1.60%
- Fund Size: ₹27,574.12 crore
- Minimum Investment: ₹100
- Exit Load: 1% if sold within a year
As of April 2024, the HDFC Small Cap Fund has shown impressive returns over different periods:
- 1-Year Return:34%
- 3-Year Return:97%
- 5-Year Return: 59%
- Return Since Launch: 88%
These numbers clearly highlight HDFC mutual funds’ ability to consistently outperform its benchmark, the S&P BSE 250 Small Cap Index, which posted a 3-year return of 28.90% during the same timeframe.
Other Top Performing Small Cap Funds
Several other small-cap funds have also achieved impressive results, with over 30% CAGR over the last three years. Let’s look at some top-performing funds:
Quant Small Cap Fund
Performance: The Quant Small Cap Fund has produced an outstanding 40.02% return over the last three years.
Strategy: The fund uses research to target high-growth small-cap firms flexibly. Small-cap stocks comprise the fund’s portfolio, with notable holdings in the financial and technology industries.
Tata Small Cap Fund
Performance: Over the last three years, the Tata Small Cap Fund has produced a solid 3Y return of 30.73%, consistently beating its peers.
Strategy: Using a diversified approach, the fund selects businesses with solid fundamentals and promising development potential. With a well-rounded growth strategy, it invests in various industries, including consumer goods and healthcare.
Motilal Oswal Small Cap Fund
Performance: This fund has shown its ability to successfully invest in the small-cap sector with a 3Y return of 30.43%.
Strategy: The fund employs a disciplined investment technique based on extensive research to acquire high-quality small-cap stocks.
SBI Small Cap Fund
Performance: With a 31.25% 3Y return, the SBI Small Cap Fund is a strong performer in the small-cap market.
Strategy: Backed by the research ability of SBI Mutual Fund, this fund seeks to identify growing businesses with substantial development potential.
Axis Small Cap Fund
Performance: The Axis Small Cap Fund has consistently performed, delivering a 3Y return of 30.10%.
Strategy: This fund uses a strict stock selection technique to focus on businesses with good management and growing potential.
Conclusion
In the small-cap sector, the HDFC Small Cap Fund stands out, providing attractive returns in addition to other top-performing funds. Small-cap funds could be a suitable option if you’re looking for solid growth potential, but you should be aware of the increased risks associated.
Considering each fund’s financial objectives, risk tolerance, and specific features is crucial before investing.