5-star rated small-cap funds: SIP of ₹10,000 grows over ₹6 lakh in 3 years
According to SEBI, small-cap funds must invest at least 65 per cent of their capital in small-cap companies with a market valuation of less than ₹5,000 Cr. Small-cap funds can produce greater returns over the long term, but because the risk is also quite high, small-cap stocks will always have significant volatility over the short to medium term. Therefore, to obtain a higher risk-reward ratio, it is preferable to remain invested for more than 5 years in a small-cap fund. Small-cap funds have the potential to produce superior returns over the long term compared to large-cap and mid-cap funds due to the higher growth potential of small-cap companies. Investors with a high-risk appetite should consider starting a SIP in small-cap funds, but their returns may be negatively impacted by a bearish market, an unstable economy, and other significant global factors. As an illustration, let’s look at two small-cap funds that, in addition to being rated 5-stars by Value Research, have turned a monthly SIP of ₹10,000 into over ₹6 lakhs in only three years.
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here