In today’s time, when there is a continuous environment of uncertainty in the financial market and stock market, common investors have created history by making disciplined investments through mutual funds. If you have also invested your small savings in the equity markets through Systematic Investment Plan (SIP) in the last few years, then you must have seen tremendous growth in your portfolio. Small cap mutual funds, which invest especially in shares of small companies, have surprised investors with their strong performance. From Quant Small Cap Fund to Union Small Cap Fund, five such best funds are being talked about everywhere which have generated huge profits for their investors over the long term. Market experts believe that even though the market goes through ups and downs in the short term, in the long term the power of compounding i.e. the power of compound interest increases the investment manifold.
When we talk about the Indian financial market, people’s attitude towards mutual funds has completely changed in the last few years. Compared to traditional investment instruments like bank FD or gold, SIP has given a new financial option to the middle class of the country. Small cap funds are those schemes which invest their money in those small companies of the stock market which have immense growth potential. Although the risk involved is slightly higher, when it comes to long-term investment horizon i.e. seven to ten years or more, these funds have the potential to give excellent returns. Financial experts always recommend that one should never stop SIP out of fear of minor market corrections or falls, because consistency is the key that makes you financially independent and gives wings to your dreams.
Quant Small Cap Fund has won the hearts of investors over the last few years due to its investment strategy and aggressive portfolio re-balancing. The biggest feature of this fund is that its fund managers select and change their shares very quickly, sensing the changing trend of the market. Due to this dynamic approach, Quant Small Cap Fund has delivered better and attractive returns to its investors in long term SIPs than expected. Those who continued to invest their small monthly installments regularly in this scheme have today created a huge corpus. However, this type of strategy also has high volatility, hence it is considered most suitable for those investors who have the ability to take risk and whose vision is completely long-term.
Apart from Quant, other select small cap schemes including Union Small Cap Fund have also maintained an excellent track record through their disciplined portfolio management and investing in stocks with strong fundamentals. These funds have not only outperformed their benchmark indices but have consistently provided excellent Compounded Annual Growth Rate returns to their investors. When investors invest a fixed small amount every month in these funds, they get the tremendous benefit of rupee cost averaging. This means that when the market falls, you get more units at a lower price and when the market goes up, the value of your portfolio increases rapidly. This is why these five major small cap funds together have played a huge and important role in strengthening the financial future of millions of investors.