ENTER SMALL-CAP FUNDS WITH A LONG INVESTMENT HORIZON
Investors India|July 2021
Small-cap funds have enjoyed a very good run over the past year. The best performing fund has given a return of 177 per cent, while the category average return stands at 101 per cent (as of June 21, 2021). While investors may still enter these funds despite the massive run-up, they need to observe a few precautions.
Sudipta Mitu
ENTER SMALL-CAP FUNDS WITH A LONG INVESTMENT HORIZON

Sound prospects: Many smaller companies in India are poised to do well because of a number of factors. The Atmanirbhar Bharat programme (aimed at import substitution) and the production-linked incentive scheme are expected to open up new opportunities for smaller, specialized manufacturers within the country. Many countries now want to reduce their dependence on China and are hence looking to reorient their supply chains towards other countries. India has an opportunity to gain from this trend. Much smaller manufacturers in sectors like chemicals, auto ancillaries, and so on could gain from this trend. Those within the capital goods sector could also benefit if there is a revival in private-sector CAPEX, for which the chances seem bright. In many industries, manufacturing units are reaching those limits of capacity utilization where investment in new capacity becomes imperative.

Expensive valuations: The returns over the past year are high. One reason for this is the base effect. The markets had fallen steeply in March 2020, so the current returns look high from that low level.

This story is from the July 2021 edition of Investors India.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the July 2021 edition of Investors India.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM INVESTORS INDIAView All
Indians are Developing Weak Bones
Investors India

Indians are Developing Weak Bones

In India, 1 out of 8 males and 1 out of 3 females suffer from osteoporosis, making India one of the largest affected countries in the world.

time-read
5 mins  |
December 2024
"The strategy behind the Tata India Innovation Fund centers on identifying companies that are driving transformative or incremental changes through innovation"
Investors India

"The strategy behind the Tata India Innovation Fund centers on identifying companies that are driving transformative or incremental changes through innovation"

Yes, we certainly believe innovation is a powerful theme with immense potential for the coming years, and we are excited to bring it to our investors.

time-read
4 mins  |
December 2024
What is Hybrid Mutual Fund?
Investors India

What is Hybrid Mutual Fund?

Hybrid Mutual Fund is a combination of more than one type of fund. While they invest in shares of companies listed on the exchange, like equity funds.

time-read
4 mins  |
December 2024
Should you invest in dynamic bond funds?
Investors India

Should you invest in dynamic bond funds?

Dynamic bond funds have delivered a category average return of 8.68 per cent over the past year, making them the fourth best-performing category, following long-duration funds, constant maturity gilt funds, and gilt funds. With interest rate cuts yet to begin, these funds remain a viable option for investors seeking to benefit from possible rate reductions.

time-read
3 mins  |
December 2024
The Multicap Solution to India's MultiDimensional Growth
Investors India

The Multicap Solution to India's MultiDimensional Growth

India is entering a transformative era of economic growth, backed by a unique combination of demographic strength, infrastructure development, and rising global prominence.

time-read
2 mins  |
December 2024
The Long-Term Benefit of Investing in Children's Future
Investors India

The Long-Term Benefit of Investing in Children's Future

A child is the most treasured part of any parent's life, and naturally, we want to give them the best of what the world has to offer. This often means not only ensuring we can meet their needs but also nurturing them to pursue their unique aspirations. Each child has their own dreams and challenges, making the early years critical as they lay the foundation for a healthy and fulfilling future.

time-read
2 mins  |
December 2024
ASK THE EXPERT
Investors India

ASK THE EXPERT

Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida

time-read
3 mins  |
November 2024
How to Naturally Reverse Fatty Liver Disease
Investors India

How to Naturally Reverse Fatty Liver Disease

The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.

time-read
2 mins  |
November 2024
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Investors India

Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile

Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?

time-read
5 mins  |
November 2024
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Investors India

India will continue to enjoy benefits of a close US relationship and trade will continue to grow

Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?

time-read
3 mins  |
November 2024