Best Small Cap Mutual Funds to invest in 2016

Best Small Cap Mutual Funds to invest in India in 2016Best Small Cap Mutual Funds to invest in India in 2016


While my journey of Rs 1 Crore is over, now I want to quickly achieve such milestones in coming years by making smart investments. While there are several Best Investment Options, one of the best way is to invest in Small Cap Mutual Funds. I have been analyzing some of the Best Small Cap Mutual Funds to invest in 2016. While these are high risk, small cap mutual funds tend to perform better in medium to long run. Which are the Top Small Cap Mutual funds to invest now?  Who should invest in these Best Small Cap Mutual Funds in India?

Best Small Cap Mutual Funds to invest in 2016


These Top and Best Small Cap Mutual Funds in India have been analyzed and shortlisted based on key parameters.

  • Picked based on highest returns received in the last 5 to 10 years. Some of the funds have less than 10 years tenure.
  • Ranked based on 1, 3, 5 and 10 years returns which indicates that such funds perform well in medium to long run.
  • Funds, which are rated by Crisil as Rank-1, Rank-2 and Rank-3 which indicates good fundamentals for these best small cap mutual funds.
  • Value research (VRO) rated these mutual funds as 5 star, 4 star and 3 star.
  • AUMs (Assets under management) > 100 Crores. This proves investor confidence among these top mutual funds.
  • Some of the fund names are indicated as “mid-cap”, however in reality they invest in small cap funds, hence value research online categorises them under Small Cap Mutual Funds.

Also Read: FundsIndia Vs Scripbox Vs ZIPSIP – Which is best mutual fund platform?

Best Small Cap Mutual Funds to invest in 2016


# 1 – DSP BR Micro Cap Fund


DSP BR Micro Cap fund - Best Small Cap Mutual funds to invest in 2016

The aim of the fund is to seek long-term capital appreciation by investing in a portfolio of stocks that are not part of the top 300 companies by market capitalisation.

This is a rare small-cap fund to have beaten its benchmark in every one of the last eight years from 2008. It has also stayed ahead of the peers fund schemes in every year except in 2012.

Why should you invest: This small cap fund has outperformed and gave amazing annualised returns of 24.6% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 132,000.  Crisil ranked it as Rank-1 and value research online as 4-Star (4 out of 5). One should have such top small cap mutual fund in their portfolio.

#2 – Franklin India Smaller Cos fund


Franklin India smaller cos fund - Top Small Cap Mutual funds to invest in 2016

The scheme aims to provide long-term capital appreciation by investing in mid and small cap companies. Normally, it would invest at least 75 per cent of its assets in smaller companies.

Why should you invest: This is my favorite small cap fund which I have been investing from several years. This small cap fund has outperformed and gave superior annualised returns of 17% in last 10 years and 24% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 127,000.  Crisil ranked it as Rank-1 and value research online as 4-Star (4 out of 5). This is one of the best small cap mutual funds to invest in 2016.

#3 – SBI Magnum Mid-cap Fund


sbi magnum midcap fund - Small Cap Mutual funds to invest in 2016

The scheme aims to provide investors with opportunities for long term growth in capital  by investing in well-diversified basket of equity stocks of Midcap and small cap companies.

Why should you invest: This small cap fund has outperformed and gave superb annualised returns of 15.6% in last 10 years and 23% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 122,000.  Crisil ranked it as Rank-2 and value research online as 4-Star (4 out of 5). One of the good small cap mutual fund to invest now.

You may like: 5 Best Sector Mutual Funds that can triple your money in medium to long term

#4 – Reliance Small Cap Fund


reliance small cap fund - best Small Cap Mutual funds for 2016

This scheme aims to generate capital appreciation by investing in smaller companies. This is just 5 years old scheme. However, in these 5 years, it has beaten its peers with high returns.

Why should you invest: This small cap fund has outperformed and gave amazing annualised returns of 22% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 123,000.  Crisil ranked it as Rank-2 and value research online as 3-Star (3 out of 5). One should have such best small cap mutual fund in their portfolio.

#5 – Canara Robecco Emerging Equity Fund


canara robecco emerging equities fund

The mutual fund scheme aims to generate long term capital appreciation by investing in diversified mid cap stocks that have a potential to emerge as the bigger corporates. For the Purpose of this fund, mid & small companies are defined as those which are ranked from 151 to 500 on the basis of market capitalisation.

Why should you invest: This small cap fund has outperformed and gave higher annualised returns of 17.7% in last 10 years and 21.6% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 117,000.  Crisil ranked it as Rank-2 and value research online as 3-Star (3 out of 5). One can make this fund as part of their portfolio.

#6 – Kotak Emerging Equity Scheme


kotak emerging equity scheme

The scheme seeks to generate long term capital appreciation by investing predominantly in equity and equity related instruments of small cap companies.

Why should you invest: This small cap fund has outperformed and gave amazing annualised returns of 20% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 114,000.  Crisil ranked it as Rank-3 and value research online as 3-Star (3 out of 5). One of the good small cap mutual fund to invest in 2016.

#7 – L&T Mid-cap Fund


l&t midcap fund-top smallcap funds to invest in 2016

The scheme aims to generate capital appreciation by investing primarily in midcap stocks. The investment universe would primarily comprise of companies that have a market capitalization ranging from Rs 300 to Rs 3000 crore, hence we classified under small cap segment.

Why should you invest: This small cap fund has outperformed and gave amazing annualised returns of 17% in last 10 years and 18% in last 5 years. If you would have invested Rs 1,000 per month in this scheme for last 5 years, your investment would have been Rs 60,000 and your investment value would have grown to Rs 108,000.  Crisil ranked it as Rank-3 and value research online as 3-Star (3 out of 5). One should have such best small cap mutual fund in their portfolio.

Also Read: 10 Amazing Mutual fund Schemes that gave highest returns in last 10 years

List of Best Small Cap Mutual funds to invest in 2016


List of Best Small Cap Mutual Funds to invest in 2016

Conclusion: These are some of the top small cap funds one should have in their portfolio. These mutual fund schemes invests in mid-cap to small cap companies and are high risk. If you are high risk to the moderate risk taker, you can invest in these funds.

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Suresh
Best Small Cap Mutual Funds to invest in 2016

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I have done by B.Com from Osmania University and then MBA-Finance from Symbiosis University, Pune. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPOs, reviewing Insurance Products, analysing Health insurance Plans etc.

18 Comments

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  1. Sir I want to invest 1k per month, which mutual fund will be better for me.

  2. Thanks for providing such a great input but i see a downside in some above small cap funds as they are now having too large corpus of around 3000 crores for funds like DSpPblack rock and others too.What i have analysed from my various reads across investment forums as corpus size increaes a funds ability to give good returns decreases.Also being in microcap does it will be able to deliver such huge returns like i past i feel doubtfull.

    Because it assume 24% CAGR in next three years also it will become double its size which i feel is way too big fot a microcap universe fund.

     

  3. Hi Suresh Sir

    Can i invest 1000 each for next 10 years , I am new to funds and stocks

  4. Hi Suresh:
    I am an ardent follower of your posts, and Thanks for your suggestions and inputs.
    I have 2 queries related to Mutual Funds.

    (1) I am holding Reliance Pharma MF for about 2 years, and also made purchases last year as well. As of now, the net returns are slight negative. Do I hold on to this or sell it now ?
    (2) My SIP is 10K each on Franklin India High Growth Cos, UTI MNC Fund and HDFC Balanced Fund. Pls suggest any changes required to these.

    1. Sunny, Reliance Pharma is good sector fund, you can hold as of now. Other funds are also good funds. Stay invested

  5. Sir how much amount should I invest as sip in mutualfunds to achieve 1 crore in 5 years

    1. There is no hard rule. It depends on your risk appetite and tenure. Keep increasing your investment value every year.

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