This Small Cap Fund From L&T Has Given Record High Returns Of 68.13% In 1 Year

Individual investors benefit from small-cap stocks more than institutional investors. This is because institutional investors prefer to buy large-cap companies since they are more stable, whereas investors seeking aggressive returns would participate in these funds. Here, we have given a well a highlight of a small-cap fund from a well know AMC, L&T Mutual Fund.

L&T Emerging Businesses Fund - Direct Plan-Growth

NAV	Fund Size	Expense Ratio
₹49.93	₹ 8189.63 Cr	0.73%

NAV as on 07 February 2022

It is a Small Cap mutual fund scheme from the house of L&T Mutual Fund. The fund was launched by the L&T AMC in the year 2014. Fund's Direct-Growth has Rs 8,190 Crores worth of AUM as of 31 December 2021 and is a medium-sized fund of its category. The fund has an expense ratio of 0.73%, which is close to what most other Small Cap funds charge. As mentioned, L&T Emerging Businesses Fund Direct-Growth has given record 68.13% returns in the last 1-year which is more than its category average of 55.59%. Since its launch, it has delivered 23.06% average annual returns, slightly below its category average. 

The scheme aims to generate and achieve long-term capital appreciation in the Indian markets through a diversified portfolio of principal equities and equity-related assets, including equity derivatives, with a major theme focus on small-cap stocks. In addition, the Scheme may invest in foreign securities. 

The ability of the L&T Emerging Businesses Fund Direct-Growth scheme to provide consistent returns is comparable to that of other funds in its category. It has a mediocre capacity to limit losses in a sinking market. Rating agency CRISIL has ranked the fund 3 and was given a 3-star rating. Its performance is ordinary when compared to its counterparts.

Investors who want to invest their money for at least three to four years expect very significant returns. At the same time, because the fund is very hazardous, these investors should be prepared for bigger losses in their investments. Investors who are willing to take on larger risks might consider investing in this category.

Portfolio

The fund invests 98.96% of its assets in Indian stocks, with 6.6% in mid-cap stocks and 68.91% in small-cap companies. The majority of the fund's assets are invested in the construction, textile, technology, metals, and engineering industries. In comparison to other funds in the category, it has acquired less exposure in the Construction and Textiles industries.

The fund's top 5 holdings are:

• KPR Mills Ltd.
• Grindwell Norton Ltd.
• Balrampur Chini Mills Ltd.
• KPIT Technologies Ltd.
• Carborundum Universal Ltd.

Returns and Performance

Lumpsum Returns on Investment of Rs 10,000

Period Invested for	Absolute Returns	Annualised Returns	Category Avg
1 Year	68.61%	68.13%	55.59%
2 Year	100.58%	41.56%	40.36%
3 Year	105.85%	27.18%	29.91%
5 Year	146.88%	19.80%	18.77%
Since Inception	399.25%	23.06%	23.29%

SIP Returns on the investment of Rs 1,000

Period Invested for	Absolute Returns	Annualised Returns
1 Year	25.70%	50.24%
2 Year	78.78%	67.27%
3 Year	88.63%	45.73%
5 Year	91.14%	26.18%

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related documents, Terms and Conditions carefully before investing. The above-mentioned information is purely informational and carried forward from MoneyControl and CRISIL. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.