With 36.41% Annualised Returns In 3-Years SIP, This Top-Rated Small Cap Fund Is Good To Invest

Small cap equity funds are a fund that invests primarily in small businesses in India. These small companies are beyond the top 250 companies and are almost unknown to us in our daily lives. Small cap firms are very unpredictable, and even while they can produce tremendous profits, they can experience losses in the short to medium term. However, these funds offer a major advantage of investing in early businesses. Returns from making early investments in enterprises that have the potential to be successful in the future.

In this article, we have highlighted one such Small Cap Fund that has given promising returns on SIP as well as on lump-sum investments. The fund outperformed the benchmark in 2 and 3 years of returns. The name of the fund is Bank Of India Small Cap Fund (Direct Plan-Growth).

Bank of India Small Cap Fund

The Bank of India Small Cap Fund is an equity small cap mutual fund from the Bank of India Mutual Fund, formerly known as BOI AXA Mutual Fund. This Small Cap mutual fund is 3 years old fund established on December 19, 2018. The scheme primarily invests in equity and equity-related instruments of small-cap companies in an effort to provide long-term financial appreciation.

Under the Direct Plan Growth Option of the fund, its Assets Under Management (AUM) is Rs 294.47 crore. The Net Asset Value (NAV) declared on 15h July 2022 is Rs 25.49. The expense ratio is 1.12%, which is higher than its category average expense ratio of Rs 0.78%.

It is a highly risky rated open-ended equity mutual fund, with 5-star ratings by Mutual Fund Rating agency CRISIL and Value Research, respectively. Fund's benchmark is Nifty Smallcap 250 TRI.

Investment

Both lump-sum and SIP investments can be made to begin investing in this fund. The minimum investment amount for SIP is Rs. 1000, compared to Rs. 5000 for starting an investment with a single deposit. The minimum amount needed to make additional investments in the fund is Rs 1000.

This fund has no lock-in period, however, the fund charges 1% on exit for redemption for units in excess of 10% within 365 days of the investment.

Annualised Returns

Lump-Sum Investment Returns

The fund under the Direct Plan-Growth has given an annual average return of 29.94% since its inception. 

1-Year	2 Year	3 Year
1.88%	50.66%	35.18%

SIP Investment Returns

The fund has given negative returns in 1 year on SIP investments.

1-Year	2 Year	3 Year
-8.37%	24.74%	36.41%

Portfolio

This is an equity fund with a major - over 90% - holding in domestic equities. particularly 92.6%. The fund has major holdings in small-cap companies around 63.49%, followed by 5.86% in large cap and 3.62% in mid-cap equities. 

It has a major holding in the capital goods and financial sector followed by other sectors such as Materials, Chemicals, Automobiles, Services, metal & mining, construction, healthcare, technology, textiles, Consumer staples, consumer discretionary, and communication.

Major holding in equity includes ICICI Bank, Timken India, City Union Bank, KPR Mills, Jamna Auto Industries, Home First Finance Company, Ratnamani Metals & Tubes, Phoenix Mills, JB Chemicals & Pharma, Balrampur Chini Mills, Rolex Rings, Tube Investments of India, VIP industries, Praj Industries, SKF India, Kei India, Greenpanel Industries, Astec Lifesciences, CreditAccess Grameen, Grindwell Norton, Solar Industries, Inox Leisure, Mold-Tek Packaging, Vedant Fashions, and TCS. 
 

Disclaimer

Mutual funds investment are subject to market. Read all scheme related documents carefully before investing. Greynium Information Technologies, and the Author are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.