Top Small Cap Mutual Funds for Investment in December 2024
Small-cap mutual funds are one of the types of equity funds that invest in small companies in India and have given over 40.44% in 2023. Small-cap funds have again gained the interest of investors and got an inflow of Rs.3,771.97 crore.
According to SEBI, small-cap funds invest in all companies except the top 250 in terms of market capitalization. The scheme has to invest at least 65% in small-cap stocks; also, these funds are more risky and volatile in the short to medium term than other equity-oriented funds and provide a higher return in the long term. For that reason, small-cap funds are suggested only for aggressive investors who have a high-risk appetite and a very long investment horizon.
Is It Right to Invest in Small Cap Funds?
If you are thinking, why invest in a small-cap fund even though this fund has so much risk? These schemes are also capable of providing very high returns over a long period.
Identifying winners in the small-cap segment is more challenging, as many of these companies are unknown and under-researched. Their management may be questionable, and they often make exaggerated or big claims.
The management with the market operators can increase the price sometimes. Because of these reasons, the market often rewards or punishes these companies more than others. In short, investing in small-cap funds is not easy for every investor; you need to search for successful fund managers who focus on small-cap stocks.
Here are the top 4 small-cap schemes in which you should invest in December 2024 to create wealth over a long period of time:
- Axis Small Cap Fund
- SBI Small Cap Fund
- Kotak Small Cap Fund
- Nippon India Small Cap Fund
In these 4 small-cap funds, the Axis small-cap fund has been in the top third quartile for 18 months now; before that, the same scheme had been in the fourth quartile for two months, and the SBI small-cap fund has been in the top third quartile for the past seven months.
