After a meagre average return of 1.34 per cent in 2022, these funds have achieved a year-to-date average return of 5.4 per cent, surpassing the 1.37 per cent increase of large-cap funds and 3 per cent of mid-cap funds.
There are several reasons why retail investors favour the small-cap fund category. Over the past 10 years, these funds have provided investors with an average return of 19.9 per cent, surpassing both large-cap funds (12.65 per cent) and mid-cap funds (18.06 per cent). Out of the 10 active funds in this category with a 10-year track record, seven have outperformed the S&P BSE small-cap index, which returned 17.2 per cent during the same period.
The small-cap universe is vast, encompassing all stocks beyond the top 250 by market capitalization. This universe is less extensively researched compared to large-cap and midcap stocks, offering mutual fund managers a greater opportunity to discover hidden gems and undervalued stocks. Consequently, there is a greater probability of them delivering alpha for their investors in this category.
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Denne historien er fra June 2023-utgaven av Investors India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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