Nippon India Small Cap Fund (Previously Known as Reliance Small Cap Fund) is a Small Cap Fund which was started in Sept 2010.
AMC – Nippon India Mutual Fund (Previously known as Reliance Mutual Fund) which is the 5th Biggest Asset Management Company in India
Scheme Type – Open-Ended Fund
Launch Date – 16th Sept’ 2010
Investment Objective – The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies and the secondary objective are to generate consistent returns by investing in debt and money market securities.
Benchmark – S&P BSE Small-Cap TRI
AUM – Rs.8,435 Crores (As on 30th Nov’ 2019)
Fund Manager – Samir Rachh (Since 2017)
- For Regular Plans – 2.06%
- For Direct Plans – 1.25%
Minimum SIP Amount – Rs.100 p.m.
Minimum Investment (Lumpsum – First Time) – Rs.5000
Minimum Investment (Subsequent Purchase) – Rs.1000
Trailing Returns (%) as on 17th Dec’19
|Particular||YTD||1 Month||3 Months||1 Year||3 Years||5 Years|
|S&P BSE Small-Cap TRI||-7.96||0.55||4.41||-6.91||4.28||5.87|
Source – Value Research Online
Value of Rs.10,000 SIP Started in this fund
|Time Period||Investment (Rs.)||Investment Value (Rs.)||Absolute Returns (%)||Annualised Returns (%)|
Top 10 Stock Holdings
|Sr No.||Company||% of Total Assets|
|4||Tube Investments of India||2.39|
|9||Tata Global Beverages||1.88|
|10||Navin Fluorine International||1.80|
Top 5 Sector Holdings
|Sr No.||Sectors||% of Total Assets|
Risk Measurement Parameters
|Particulars||Standard Deviation||Sharpe Ratio||Beta||Alpha|
|S&P BSE Small-Cap TRI||19.65||0.01||–||–|
Source – Value Research Online
As we can see the fund has higher SD than Category but lower than Benchmark, so the fund get outperform category but not the benchmark. The fund has a higher Sharpe Ratio than the benchmark and category which means the fund has better risk-adjusted returns. The beta of the fund is less than 1 which means the fund is less volatile but the beta of the fund is higher than the Category. Alpha of the fund is 5.51 which means the fund has better chances of outperforming its Index and the Alpha of the fund is also better than the benchmark.
Should You Invest in Nippon India Small Cap Fund?
Looking at Fund’s Trailing Performance we can say that fund has underperformed in the short term but the long term returns (5 Years or more) are very good and has outperformed both benchmark and category. Fund has 95% Allocation to Equity with 22.98% of AUM in Top 10 Stocks, Sector Allocation is also good with Top 5 Sectors Contributing 30.73% of AUM. Risk Analysis also shows that the fund has the strength to generate Excellent Returns and Outperform benchmark and Category both.
Investors with Risk Appetite and Long Term of view of At least 5 Years or more should definitely invest in this fund. Investing through SIP is an excellent way to invest in Mutual Funds. Also, Avoid Investing for Short Term as the fund is more volatile and underperform in the Short Term.
Also, Investors who are already invested in this fund would have seen negative returns, but they should not be worried about short term volatility and have a long term view. The fund is among Top 5 Small-Cap Funds in India and Investors Should Invest with a long term view.
Bonus Tip – Whenever you are investing in Mutual Funds, Always Invest through Direct Plans and Avoid Regular Plans. You can check out the difference between Direct vs Regular Plans and How to Switch from Regular to Direct Plans.
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