SBI Small Cap Fund: Leading Performer of Small Cap Category

SBI Small Cap is the emerging star of small-cap mutual funds’ category and was introduced by SBI Mutual Fund on Sept 09, 2009. As the name suggests, the fund urged to invest in the companies which have low market capitalisation as compared to the mid-cap and large-cap companies but have high growth potential. So, if you are looking for investing through an online SIP for a long-term, you can invest in the fund. Though, SBI Small Cap Fund suspended taking any fresh investment in October 2015, the services was resumed again in May 2018. This is because it had to invest beyond the 401st in terms of the market capitalisation, but after SEBI’s new rules, it can invest in the stocks beyond 251st companies. Further, to restrict the excess inflows, it has inserted an investment cap at Rs 25,000 through SIP mode on a single PAN. Besides, to support the regular income needs of the investors, it also parks a small percentage in the debt and money market instruments.

SBI Small Cap Fund Growth: Investment Philosophy

SBI Smallcap has tried to restrict the exposure to risk and offer risk-adjusted returns by investing in various sectors and industries. The fund manager, Mr R Srinivasan furthermore, follows the blend of growth and value investment approach to provide consistent returns in both the cycles. This also helps the fund management team to diversify the assets in both the areas as well as hold a large number of assets. Further, it follows the bottom-up approach for picking-up the stocks of small-cap companies or emerging companies.

Besides its all the investment strategies, the fund manager of SBI Small-Cap Fund follows the following parameters for investing or picking up a stock:

  • Management of the Company
  • Growth Perspective
  • Returns on Capital
  • Long-Term Competitive Advantage
  • Current Stock Valuations in the Market

How SBI Small Cap Mutual Fund Scheme Performed in the Past?

As we know, SBI Small Cap Fund Regular Growth is an open-ended scheme, which invests in the stocks of small-cap companies. Therefore, it aims to create wealth for the investors in the long run. So, let’s see how the fund has performed in the past on the long-term basis in the points provided below:

  1. The fund has generated annualised returns of 18.66% since its launch (as provided on Oct 30, 2018). It is ranked amongst the top performers of the small cap mutual fund category as it has always outperformed its benchmark and category in its past eight years history.
  2. The annualised returns of this scheme for the past three years were 13.90%, five years were 29.56%, and seven years was 23.41%, respectively. These returns have outperformed the benchmark NIFTY Smallcap TRI as well as other funds of the category.
  3. SBI Smallcap Fund is also generating a good percentage of alpha, beating its category average to provide risk-adjusted returns as well as downside volatility.
  4. The fund has also outperformed the benchmark as well as the category in the calendar year returns, except for the year 2012. This shows its consistency to provide high yields in all the market cycles.

Should I Invest in SBI Smallcap Fund Regular Plan?

If you are an active investor, understand the risk prevailing in the market as well as have a long duration to stay invested, then SBI Small Cap Fund G will be a good choice for you. Being a high-risk scheme, it is highly recommended that you should buy this only if you can bear the volatility as well as ups and downs in your investment values due to the fluctuating market.

So, if you wish to achieve your financial objectives with a bit high risk in the next seven to ten years, then you must start your online investment in SBI Small Cap growth scheme right away at MySIPonline. We will assist you in simplifying the entire mutual fund investment process, making your journey a success.