Lester Freeman
The Nippon India Small Cap Fund is a mutual fund that seeks to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies. The fund has been in existence for over 11 years and has delivered average annual returns of 27.93% since its inception. It has a very high-risk rating and an expense ratio of 0.66%. The minimum SIP investment amount is ₹1,000, and there is no lock-in period for this fund. The fund's portfolio is largely conservative, with most of its holdings in Large Cap stocks and debt instruments. To invest in this fund, one can purchase it directly from the website of the fund house, Nippon India Mutual Fund, or through platforms like MF Central and MF Utility.
What You'll Learn
How to invest in the Nippon India Small Cap Fund
Overview
The Nippon India Small Cap Fund is a mutual fund scheme that has been in existence for over 11 years. The fund seeks to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies. The fund has an expense ratio of 0.66% to 1.58% and an exit load of 1% if redeemed within 1 year.
Performance
The Nippon India Small Cap Fund has delivered average annual returns of 21.04% to 27.94% since its inception. The fund has also generated consistent returns, doubling the money invested every 2 years.
Investment Strategy
The fund's portfolio is largely conservative, with most of its holdings in Large Cap stocks and debt instruments. As of September 30, 2024, the fund had invested 95.94% in equity, with 6.58% in Large Cap stocks, 12.18% in Mid Cap stocks, and 51.47% in Small Cap stocks. The fund's top holdings include Tube Investments of India Ltd., Multi Commodity Exchange of India Ltd., and Voltamp Transformers Ltd.
How to Invest
To invest in the Nippon India Small Cap Fund, you can purchase it directly from the website of the fund house, Nippon India Mutual Fund. You can also buy mutual funds through platforms like MF Central and MF Utility. If you prefer not to buy mutual funds online, you can seek help from a mutual fund distributor or connect with your bank, as most banks also act as mutual fund distributors.
The minimum SIP investment amount for the Nippon India Small Cap Fund is ₹1,000, and there is no lock-in period for this fund.
It is important to note that this fund carries a Very High-risk rating, and investors should not invest in this fund if they need to redeem their investment in less than seven years.
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The minimum investment required
Nippon India Small Cap Fund - Direct Plan
The Nippon India Small Cap Fund - Direct Plan does not specify a minimum investment amount. However, it is recommended that investors only invest in this fund through the SIP (Systematic Investment Plan) route.
Nippon India Small Cap Fund - Regular Plan
The Nippon India Small Cap Fund - Regular Plan has a minimum SIP investment amount of ₹1,000. The fund does not specify a minimum investment amount for lump-sum investments, but it is generally higher than the SIP amount.
Nippon India Small Cap Fund - Growth Plan - Growth Option
The Nippon India Small Cap Fund - Growth Plan - Growth Option has a minimum SIP investment amount of ₹500 and a minimum lump-sum investment of ₹5,000.
Nippon India Small Cap Fund Direct-Growth
The Nippon India Small Cap Fund Direct-Growth has a minimum investment amount of ₹0.
It is important to note that the Nippon India Small Cap Fund is considered a high-risk investment, and investors are advised not to invest in this fund if they need to redeem their investment in less than seven years.
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The fund's historical performance
The Nippon India Small Cap Fund has delivered average annual returns of 27.93% to 27.94% since its inception 11 years ago. In the last year, it has delivered returns of 46.36%. The fund has doubled the money invested in it every 2 years.
The fund has generated a 17.11% annual return in 70% of cases for investors holding for at least 5 years. For every unit of risk, the fund produces 20% more returns.
The Nippon India Small Cap Fund has delivered 21.04% returns since its inception 12 years ago.
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The fund's portfolio
The Nippon India Small Cap Fund is a mutual fund scheme from Nippon India Mutual Fund. The fund's portfolio is largely conservative, with most of its holdings in large-cap stocks and debt instruments. As of September 30, 2024, the fund had the following sector allocations:
- Capital Goods (19.93%)
- Financial (11.02%)
- Consumer Staples (8.39%)
- Healthcare (7.76%)
- Services (6.62%)
- Construction (5.06%)
- Energy (4.86%)
- Consumer Discretionary (4.76%)
- Metals (4.32%)
- Materials (3.74%)
- Technology (3.47%)
- Utilities (2.92%)
- Telecommunication Services (2.22%)
- Industrials (1.76%)
- Other (4.04%)
The fund's top 10 holdings as of September 30, 2024, were:
- Tube Investments of India Ltd.
- Multi Commodity Exchange of India Ltd.
- Voltamp Transformers Ltd.
- Apar Industries Ltd.
- Kirloskar Brothers Ltd.
- Bharat Heavy Electricals Ltd.
- Elantas Beck India Ltd.
- CreditAccess Grameen Ltd.
- Sundaram Finance Ltd.
- Mahindra CIE Automotive Ltd.
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Taxation and exit load
When investing in the Nippon India Small Cap Fund, there are a few things to keep in mind regarding taxation and exit load. Firstly, if you redeem your investment within one year, an exit load of 1% is charged. This means that if you decide to withdraw your investment before it matures, you will be charged a small percentage of your total investment as a fee.
In terms of taxation, the Nippon India Small Cap Fund is taxed differently depending on the duration of your investment. If you redeem your investment within one year, short-term capital gains tax of 20% is applicable. On the other hand, if you redeem your investment after one year, long-term capital gains tax of 12.5% is applicable on returns of ₹1.25 lakh or more in a financial year.
It is important to note that these tax rates may not include cess or surcharge, so be sure to check the latest tax regulations before investing. Additionally, dividends are taxed according to the investor's income tax slab, and a TDS of 10% is deducted if the dividend income exceeds ₹5,000 in a financial year.
When investing in the Nippon India Small Cap Fund, it is crucial to consider your investment horizon. As mentioned earlier, the fund follows a conservative investment strategy, investing primarily in large-cap stocks and debt instruments. Therefore, it is recommended to hold your investment for at least seven years to beat inflation and potentially achieve higher returns.
Remember, investing in small-cap funds like the Nippon India Small Cap Fund comes with higher risk compared to investing in larger companies. While you can expect higher returns in the long term, there will be more severe ups and downs along the way. Ensure you carefully consider your financial goals, risk tolerance, and investment horizon before investing.
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Frequently asked questions
You can invest in the fund directly from the website of the fund house, or through platforms like MF Central and MF Utility. You can also seek help from a mutual fund distributor or your bank.
The minimum SIP amount for the Reliance Small Cap Fund is ₹1,000.
The expense ratio of the Reliance Small Cap Fund is 1.58%. This is the annual fee charged by the fund house for managing your investment, and it is taken from the fund's returns.
