4 Small Cap Mutual Funds Rated No 1 & No 2 By Crisil, Should You Start SIPs In 2023?

It has been a good year for the markets, with the Sensex and the Nifty hitting record levels in November and December of 2022. Here are 5 small cap equity mutual funds that are good to invest for 2023, based on the good ratings by rating agency CRISIL. We have no investment advise on these funds and are proving you information based on facts and Crisil ratings.

Canara Robeco Small Cap Fund, Direct, Growth

The Canara Robeco Small Cap Fund, Direct Plan Growth has been rated No 1 by Crisil with assets under management of Rs 4367 crores. The 1-year returns from the fund is 9.33%, and the 3-year returns is 38.93% on an annualized basis. The fund has holdings in most small cap names including the likes of City Union Bank, Cera Sanitaryware, KEI Industries, Can Fin Homes etc. The current net asset value of the fund if you want to start SIPs or lumpsum investment is Rs 27.04. One of the good things of this fund is that the expense ratio is very low at 0.39%, which actually is very good.

Quant Small Cap Fund, Direct, Growth

This fund not only has No 1 ratings from Crisil, but, a lot of personal finance portals and investment advisory and personal finance apps have rated it very highly. The fund has generated annualized returns of 56% in the last 3-years, while the 5-year returns are 16.4% on an annualized basis. The portfolio of the fund includes names like ITC, IRB Infrastructure, RBL Bank, Punjab National Bank, HFCL, India Cements, Hindustan Copper etc. The net asset value of Quant Small Cap Fund, Direct, Growth at the moment is a solid Rs 156.27, which means you can buy units at this rate. It's important to note that small cap mutual funds can be risky, given that returns from small caps can be very volatile.

Bank of India Small Cap Fund, Direct, Growth

This fund is not rated No 1, but, is rated No 2 by Crisil. The fund has near 95% investment in equities of which 5.4% is in Large Cap stocks, 9.8% is in Mid Cap stocks, 61.46% in Small Cap stocks. The fund has very small exposure to debt and government securities, which means risks can be far higher in case the markets fall. Bank of India Small Cap Fund, Direct, Growth has given annualized returns of 42% over the last 3-years. One can start SIPs by making small investments and for small cap mutual funds the advise would always be the SIP route, as lumpsum would not be suitable for risk averse investors.

Nippon India Small Cap Fund, Direct Growth

Like Bank of India Small Cap Fund, Direct, Growth, this fund too has been rated No 2 by Crisil. Nippon India Small Cap Fund, Direct Growth has given 3-year returns of 37.37% on an annualized basis, while the 5-year returns is 17.21%. Interestingly, the fund like most of its peers have generated lesser returns over the longer-term. Nippon India Small Cap Fund, Direct Growth has exposure to stocks like Tube Investments of India, HDFC Bank, Bank of Baroda, KPIT Technologies. Having said that most of the small cap mutual fund schemes do have some exposure to largecap stocks as well. Small cap mutual funds are for those willing to take risks, unless you are consider SIPs.

Disclaimer

Mutual fund investments are subject to market risk and all the more small cap mutual fund schemes. Neither ratings, nor past performance can be guarantee for good returns in the future. The above-mentioned information is purely informational and doesn't guarantee any return. Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.