Investing can be a daunting task, especially if you are not familiar with the stock market and its various investment options. But, what many don’t realize is that investing in the stock market does not have to be stressful or complicated. Investing in mutual funds is one of the easiest and most efficient ways for you to diversify your portfolio and make money over time.
One of the top-performing mutual funds in India is Nippon India Small Cap Fund. In this article, we will explain everything about this fund and why it’s a great choice for long-term investors.
What is the Nippon India Small Cap Fund?
The Nippon India Small Cap Fund is a mutual fund that invests in small-cap stocks. The fund was launched on October 1, 2007 and has since amassed a corpus of over Rs. 2,000 crore. The Nippon India Small Cap Fund is managed by Sohini Andani and aims to generate long-term capital growth by investing in a diversified portfolio of small-cap stocks.
The fund has a track record of delivering strong returns, with an annualized return of 15.8% since inception. The Nippon India Small Cap Fund is one of the top-performing small-cap funds in India and is well-positioned to capitalize on the growth potential of small-cap stocks.
The Different Types of Funds
Small cap funds are a type of mutual fund that invests in small-cap stocks, or companies with a market capitalization of $2 billion or less. While small caps tend to be more volatile than large caps, they also offer the potential for higher returns.
There are many different types of small cap funds, each with its own investment strategy. Growth funds focus on companies that are expected to experience above-average growth, while value funds look for companies that are undervalued by the market. Blend funds invest in both growth and value stocks.
Other types of small cap funds include sector funds, which focus on a specific industry, and international funds, which invest in foreign companies. There are also index funds that track a benchmark index such as the Russell 2000 Index.
No matter what type of small cap fund you choose, it’s important to do your research and understand the risks involved before investing.
Pros and Cons of the Nippon India Small Cap Fund
When it comes to investing in small companies, there are a lot of pros and cons to consider. On one hand, small companies have the potential to offer investors high growth rates. On the other, they’re also more volatile and tend to be less established than larger companies.
The Nippon India Small Cap Fund is an actively managed fund that invests in small-cap stocks. As such, it offers investors exposure to some of the fastest-growing companies in India. The fund has a track record of outperforming its benchmark index, the BSE Small Cap Index, over the long term.
However, there are a few things to keep in mind before investing in the Nippon India Small Cap Fund. First, as with any small-cap fund, it’s important to remember that these stocks can be highly volatile. Second, this fund is relatively new; it was launched in 2016, so it doesn’t have a long track record yet.
Overall, the Nippon India Small Cap Fund is a good option for investors looking for high growth potential in Indian small-cap stocks. However, it’s important to remember that these stocks can be volatile and that the fund is still relatively new.
What is the Objective of the Fund?
The Nippon India Small Cap Fund seeks to provide long-term capital appreciation by investing in small and mid-cap companies. The fund follows a bottom-up stock picking approach and invests in companies with good growth potential.
The objective of the fund is to generate long-term capital appreciation by investing in a diversified portfolio of small and mid-cap stocks. The fund follows a bottom-up stock picking approach and invests in companies with good growth potential.
How is the Fund Managed?
The fund is managed by a team of experienced professionals who are well-versed in small cap companies. The team employs a rigorous research process to identify companies that have the potential to generate superior returns. Once a company is identified, the team works closely with management to understand the business and create a detailed investment thesis. The team then constantly monitors the company to ensure that it continues to meet their standards for an attractive investment.
What are the Risks associated with the Fund?
The Small Cap Fund is subject to certain risks including but not limited to the following:
1) Risk of investing in small-sized companies – The fund’s investments are focused on small-sized companies which may be relatively new and unproven. As a result, these companies may be more volatile and less liquid than large cap companies.
2) Risk of high portfolio turnover – The fund has a high portfolio turnover which may result in higher transaction costs.
3) Risk of concentration – The fund is concentrated in a particular sector or industries which makes it more volatile to changes affecting those sectors or industries.