A Guide To Investing In Hdfc Small Cap Fund

HDFC Small Cap Fund is a mutual fund scheme that has been in existence for over 11 years, investing predominantly in small-cap companies. The fund has provided long-term capital appreciation and income for investors, with average annual returns of 21.28% since its inception. With an expense ratio of 0.66% to 0.68%, it is close to what most other small-cap funds charge. The fund has an exit load of 1% if redeemed within 1 year and short-term capital gains are taxed at 20% if redeemed before 1 year. Long-term capital gains are taxed at 12.5% on returns of ₹1.25 lakh or more in a financial year. The fund has an asset under management (AUM) of ₹33,894 Crores as of September 30, 2024, and is considered a medium-sized fund in its category.

HDFC Small Cap Fund's investment options and expense ratios

HDFC Small Cap Fund is a small-cap mutual fund scheme from HDFC Mutual Fund. The fund has been in existence for 11 years and 9 months, having been launched on 1st January 2013. It has an expense ratio of 0.66%, which is close to what most other small-cap funds charge. The expense ratio is the annual charge you pay to the mutual fund company for managing your investments in that fund.

HDFC Small Cap Fund has two options: Regular and Direct. The only difference between the two is the commission paid to the mutual fund broker/distributor. As an investor, you do not need to pay any additional fees to purchase any of these options. However, the regular plan has a higher expense ratio, while the direct plan has a lower expense ratio. This difference is due to the commission paid to the broker/distributor. A lower expense ratio leads to higher returns for investors.

The HDFC Small Cap Fund - Regular Plan had an expense ratio of 1.60 as of 29 February 2024. The NAV of the HDFC Small Cap Fund - Regular Plan was ₹120.7110 as of the same date. The AUM of the HDFC Small Cap Fund - Regular Plan was ₹28,607 Cr as of 31 January 2024.

The HDFC Small Cap Fund Direct-Growth option has an expense ratio of 0.66%. The NAV of the HDFC Small Cap Fund Direct-Growth as of 7 October 2024 was 154.31. The AUM of the HDFC Small Cap Fund Direct-Growth is ₹33,894 Cr as of 30 September 2024.

How to invest in HDFC Small Cap Fund

The HDFC Small Cap Fund is an equity mutual fund scheme that was launched on 10 December 1999. The fund seeks to provide long-term capital appreciation and income by investing predominantly in small-cap companies.

You can invest in the HDFC Small Cap Fund in the following ways:

• Directly from the HDFC Mutual Fund website.
• Through platforms like MF Central and MF Utility.
• With the help of a mutual fund distributor, such as a bank.

Important Information for Investors

• The fund has no lock-in period.
• The expense ratio of the direct plan is 0.66% or 0.68%.
• There is an exit load of 1% if the investment is redeemed within 1 year.
• The fund has delivered average annual returns of 21.28% or 21.29% since its inception.
• The minimum SIP investment is ₹100.
• The fund is suitable for investors who are looking to invest money for at least 3-4 years and are ready for the possibility of higher losses in their investments.
• Do not invest in this fund if you need to redeem your investment in less than seven years.

HDFC Small Cap Fund's performance and rankings

HDFC Small Cap Funds Performance and Rankings

The HDFC Small Cap Fund is a mutual fund scheme from HDFC Mutual Fund that invests predominantly in small-cap companies. The fund has been in existence for almost 12 years, having been launched on 1st January 2013.

Performance

As of 7th October 2024, the fund's NAV (Net Asset Value) was 154.31, with a 1-day change of -2.16%. The fund has delivered average annual returns of 21.28-21.29% since its inception. The HDFC Small Cap Fund has generated the highest return among small-cap funds in the last 2 years and has doubled the money invested in it every 3 years.

Rankings

The HDFC Small Cap Fund has an ET Money Rank of #9 out of 19 small-cap funds and a consistency rating of 3.5. This indicates that the fund has not generated great returns and those returns have not been very consistent. The fund has an expense ratio of 0.66%, which is close to what most other small-cap funds charge.

The fund has a Crisil Rank of 3, updated from 4 in the previous quarter. It has an average performance among its peers in terms of returns. The HDFC Small Cap Fund has a Value Research Rating indicating a "Very High Risk" level.

Suitability

The HDFC Small Cap Fund is suitable for investors who are looking to invest money for at least 3-4 years and are seeking very high returns. However, these investors should also be prepared for the possibility of higher losses in their investments.

HDFC Small Cap Fund's tax implications

HDFC Small Cap Fund is a mutual fund scheme that falls under the Equity: Small Cap category of funds. It was launched on April 3, 2008, and is managed by Chirag Setalvad and Amar Kalkundrikar. The fund seeks to provide long-term capital appreciation/income by investing predominantly in small-cap companies.

Short-Term Capital Gains Tax (STCG):

If the units of the HDFC Small Cap Fund are redeemed or sold within 1 year of investment, the entire amount of gain is taxed at a rate of 15% (as per some sources). However, another source mentions a tax rate of 20% for short-term capital gains if the units are redeemed before 1 year.

Long-Term Capital Gains Tax (LTCG):

If the units are redeemed or sold after 1 year from the date of investment, gains of up to Rs. 1 lakh in a financial year are exempt from tax. For gains exceeding Rs. 1 lakh, a tax rate of 10% is applicable.

Dividend Distribution Tax:

Dividend income from the HDFC Small Cap Fund will be added to the investor's income and taxed according to their respective tax slabs. Additionally, if an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house will deduct a TDS (Tax Deducted at Source) of 10% on such income before distributing the dividend.

Exit Load:

The HDFC Small Cap Fund has an exit load of 1% if the units are redeemed within 1 year of investment.

HDFC Small Cap Fund's investment objective

The HDFC Small Cap Fund is a mutual fund scheme that seeks to provide long-term capital appreciation and income by investing predominantly in small-cap companies. The fund has been in existence for over 11 years, having been launched on 1st January 2013.

The HDFC Small Cap Fund has delivered average annual returns of 21.28%-21.29% since its inception and has an expense ratio of 0.66%, which is close to what most other small-cap funds charge. The fund has an exit load of 1% if redeemed within 1 year.

The fund has the majority of its money invested in the Services, Capital Goods, Healthcare, Financial, and Automobile sectors. Its top holdings include Firstsource Solutions Ltd., eClerx Services Ltd., Aster DM Healthcare Ltd., and Sonata Software Ltd.

The HDFC Small Cap Fund is suitable for investors who are looking to invest money for at least 3-4 years and are seeking very high returns. However, these investors should also be prepared for the possibility of higher losses in their investments.

Frequently asked questions