Investing in mutual funds might be challenging, particularly if you need help determining which plan best suits your financial objectives. SBI Mutual Fund is a prominent asset management company in India that provides a range of funds suited to various investing requirements. From various mutual funds, the SBI Small Cap Mutual Fund has become famous for investors seeking portfolio diversification with growth potential.
So, where does the SBI Small Cap Mutual Fund fit within the broader range of SBI Mutual Funds, and how can it contribute to achieving your financial goals? Let’s explore this step by step.
Overview of SBI Small Cap Funds
SBI Small Cap Fund is an open-ended equity mutual fund that invests 65% of its assets in small-cap companies, typically with a market capitalization of under ₹500 crore. The fund attracts investors looking to capitalize on growth prospects in emerging sectors since it pursues long-term capital growth by constructing a diverse portfolio of small-cap businesses.
Performance Overview of SBI Small Cap Mutual Funds (As of Oct 9 2024)
| Performance Metric | Value |
| Current NAV (Direct Plan) | ₹209.71 |
| Fund Size | ₹33,068.50 Cr |
| Expense Ratio (Direct Plan) | 0.63% |
| 1-Year Return | 35.73% |
| 3-Year Return | 21.81% |
| 5-Year Return | 30.31% |
| Exit Load | 1% if redeemed within 1 year |
| Minimum SIP Investment | ₹500 |
How SBI Small Cap Fund Fits in SBI Mutual Funds Portfolio?
It’s crucial to keep in mind that your entire investing strategy shouldn’t consist of just one fund. This is how the SBI Small Cap Mutual Fund enhances the offerings of other SBI funds across different categories.
Diversification
Including the SBI Small Cap Mutual Fund in an investment portfolio helps increase its diversification. Large-cap stocks and small-cap equities can exhibit dissimilar behaviors throughout distinct market cycles.
Investors who can tolerate short-term volatility and have a long-term vision will benefit most.
Complementing Other Funds
There are a variety of funds in the SBI Mutual Funds portfolio, including large-cap, mid-cap, and hybrid funds. These products are further strengthened by the SBI Small Cap Mutual Fund, which exposes investors to an alternative market niche.
Small-cap funds concentrate on up-and-coming businesses with substantial growth potential, while large-cap funds prioritize well-established corporations. This equilibrium enables investors to profit from growth throughout the range of the market.
Hedge Against Inflation
Due to their growth-oriented strategy, small-cap funds have frequently outperformed large-cap and mid-cap funds during rising inflation.
Despite the higher risk associated with these products, the potential for gains surpassing inflation makes the SBI Small Cap Mutual Fund appealing to investors with long-term objectives.
Asset Under Management (AUM)
The SBI Small Cap Mutual Fund has a sizeable asset under management (AUM) of over ₹33,068.50 crore as of Oct 9, 2024. A high AUM can offer stability and liquidity, which makes the fund a solid option for investors wishing to break into the small-cap market.
It also indicates a robust investor base and faith in the fund’s administration.
Investing Options and Accessibility
A minimum initial investment of ₹5,000 and a minimum SIP investment of ₹500 make the SBI Small Cap Mutual Fund accessible to a broad spectrum of investors.
Small-cap companies can expand, and this accessibility makes them appealing to experienced investors and novices in the mutual fund industry.
Fund Management
An experienced group of fund managers oversees the actively managed SBI Small Cap Mutual Fund. Having managed small-cap portfolios for years, fund manager R. Srinivasan assures clients that their money is regularly tracked and modified to optimize returns.
Conclusion
In conclusion, the SBI Small Cap Mutual Fund contributes significantly to the SBI Mutual Funds portfolio by offering focused exposure to small-cap firms with solid growth potential. Its strategic focus on risk management, diversification, and long-term capital appreciation makes it a desirable alternative for investors wishing to improve their portfolios.
By comprehending the fund’s place in the larger SBI Mutual Funds structure, investors can make well-informed choices that complement their financial objectives.
