SBI Small Cap Fund Review – Should You Invest?

SBI Small Cap Fund Review – Should You Invest?

SBI Small Cap is a Small Cap Fund which was started in Sept 2009.

Fund Information

AMC – SBI Mutual Fund is the 3rd Largest Asset Management Company in India with AUM of Rs.3,20,662 Crore and was Setup in 1992.

Scheme Launch Date – 09th Sept’ 2009

Investment Objective – To provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well-diversified basket of equity stocks of small-cap companies.

Benchmark –  S&P BSE SmallCap

AUM – Rs.3,035 Crore

Fund Manager – Mr R.Srinivasan (Managing the Scheme Since Nov’13)

Exit Load – 1% if Investment is Redeemed Before 365 Days of Investment

Expense Ratio

  • For Regular Plans – 2.24%
  • For Direct Plans – 0.98%

Minimum SIP Amount – Rs.500 p.m.

Minimum Investment – Rs.5000

Minimum Additional Investment – Rs.1000

Scheme Performance

Trailing Returns (%) as on 19th Dec’19
Particular1 Year3 Years5 YearsSince Inception
Fund8.64%13.63%15.72%17.86%
S&P BSE Small-Cap-5.03%4.11%4.67%7.68%
S&P BSE Sensex14.05%16.67%8.70%11.02%

Source – SBI Mutual Fund

Value of Rs.10,000 SIP Started in SBI Small Cap Fund
Time PeriodInvestment (Rs.)Investment Value (Rs.)Absolute Returns (%)Annualised Returns (%)
1 Year1,20,0001,26,6325.5310.39
2 Years2,40,0002,42,2680.950.91
3 Years3,60,0003,88,3107.864.98
5 Years6,00,0007,86,51631.0910.76
10 Years12,00,00033,91,796182.6519.71

Source – Moneycontrol

Investment Portfolio

Asset Allocation
SBI Small Cap Fund - Asset Allocation
Top 10 Stock Holdings (As on 30th Nov’19)
Sr No.Company% of Total AUM
1Hawkins Cookers Ltd.4.22
2JK Cement Ltd.4.11
3Dixon Technologies India Ltd.4.11
4Hastun Agro Product Ltd.3.95
5Tube Investments Of India Ltd.3.57
6Relaxo Footwears Ltd.3.47
7NIIT Ltd.3.30
8Carborundum Universal Ltd.3.05
9HDFC Bank Ltd.2.94
10Blue Star Ltd.2.85
Total35.57

Source – SBI Mutual Fund

Top 5 Sectors
Sr No.Sectors% of Total AUM
1Consumer Goods26.24
2Manufacturing17.42
3Financial Services7.56
4Services5.34
5Automobile4.30
Total60.86

Source – SBI Mutual Fund

Risk Measurement Parameters

ParticularsStandard DeviationSharpe RatioBetaAlpha
Fund18.920.530.8511
S&P BSE Small-Cap TRI19.650.01
Category17.180.070.802.47

Source – Value Research

Also Read – What is Standard Deviation, Sharpe Ratio, Beta and Alpha in Mutual Funds?

Risk Analysis

Standard Deviation – As we see the fund has a higher Standard Deviation than the category but lower than the average. This means the fund can generate better returns than the category but lower than the benchmark.

Sharpe Ratio – The fund has a higher Sharpe Ratio than benchmark and category, which means the fund has better risk-adjusted returns.

Beta – The Beta of the fund is less than 1 which means the fund is comparatively is less volatile, but the category has lower beta than the fund which means the fund is more volatile than the category.

Alpha – The fund again has an alpha of 11 which is much higher than the category average of 2.47, An Alpha of 11 means fund has excellent chances of outperforming its benchmark.

Should You Invest in SBI Small Cap Fund?

Looking at the returns, the fund has outperformed its benchmark Small Cap Index in all-time horizons from 1 Year, 3 Years,5 Years and Returns from inception. Top 10 Holdings make around 35% of AUM which is a bit higher than the industry average. Top 5 Sectors Holdings make around 60% and Top 3 Sectors make around 51.22% which is quite high and shows fund lacks sector diversification.

Risk Analysis shows us the fund is average risk and high Return fund, also the Fund has consistently beaten its benchmark. The fund also has the capacity to outperform benchmark and category with better lower risk-adjusted returns.

Investors with Long Term view of At least 7 Years or more should definitely invest in this fund. The fund can be volatile in the short term but the long term returns are always excellent. Investing with SIP in this fund is an excellent way to invest avoid lumpsum investing when markets are at record highs.

Also, Investors who are already invested in this fund would have seen average returns, but they should not be worried about short term volatility and have a long term view. The fund is among Top 3 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.

Also Read – Nippon India Small Cap Fund Review

Hope you liked the Review of SBI Small Cap Fund and If you have any question do let us know in the Comments Section Below & Thank You very much for reading.

1 thought on “SBI Small Cap Fund Review – Should You Invest?”

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