Smallcap funds deliver just 1% return in March quarter

The smallcap mutual fund (MF) category that invests in companies ranked below 251 in terms of market capitalisation offered an average return of 1% in the January-March quarter of 2024. There are around 27 smallcap schemes in the market.

The smallcap schemes are benchmarked against Nifty Smallcap 250 – TRI, S&P BSE 250 Small Cap – TRI, and Nifty Smallcap 100 – TRI. These benchmarks gave 1.55%, 1.04%, and 0.43% in the January-March quarter of 2024.

Around seven smallcap schemes gave over 3% returns in the January-March quarter of 2024. Quant Small Cap Fund, the topper in the category, gave a 7.82% return during the previous quarter. ITI Small Cap Fund gave 5.47% in the said period.


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Nippon India Small Cap Fund, the largest scheme in the smallcap category based on assets managed, gave 1.47%. The scheme managed assets worth Rs 46,044 crore as of February 29.

ETMutualFunds also compared the performance of smallcap schemes with the performance of their respective benchmarks. Out of 27 schemes in the category, 17 failed to beat their respective benchmarks.

Nippon India Small Cap Fund, the largest scheme in the smallcap category based on assets managed, also failed to beat its benchmark. The scheme offered 1.47% against 1.55% by its benchmark (Nifty Smallcap 250 – TRI). Franklin India Smaller Companies Fund underperformed against its benchmark.

Aditya Birla Sun Life Small Cap Fund also failed to outperform its benchmark. The scheme lost 0.70% in the March quarter. The scheme is benchmarked against S&P BSE 250 Small Cap – TRI which gave 1.04% during the quarter.

19 of the 27 smallcap schemes in the market offered positive returns, while eight ended the quarter with negative returns. UTI Small Cap Fund was the top laggard. The scheme lost around 3.64%. DSP Small Cap Fund lost 3.10%.

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As per the last available AMFI data, the smallcap category received total inflows of Rs 6,179.44 crore in the quarter gone by. The net asset under management stood at February Rs 2.49 lakh crore as of Feb 29, 2024.

Smallcap schemes are recommended for aggressive investors. Investors should consider investing in them only if they have a high-risk appetite and a long investment horizon.

(Disclaimer: All small funds, regular and growth options available for investment in the market were considered for this report. This exercise is not a recommendation. It was done to find how small cap funds performed in the January – March quarter of 2024. One should not make investment or redemption decisions based on the above exercise. One should always consider risk appetite, investment horizon, and goals before making investment decisions. Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Harry Byrne

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