The bull market that started in end-March 2020 continues to spiral upwards. Small-cap funds have been key beneficiaries of the massive rally and many and delivered stupendous returns, after years of underperformance. Unlike market moves in the earlier years, a broad-based rally over the last 16 months ensured all-round participation.
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Quant Small Cap Fund was the chart topper, with 341 percent returns in absolute terms, from the March 2020 market lows, according to data from ACEMF. The scheme had accorded heavy weightages to sectors such as pharmaceuticals, chemicals and software. The massive rally in these segments aided the fund's stupendous returns. The fund has assets of Rs 701 crore.
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Nippon India Small Cap Fund came a distant second, with 203 percent returns from March 2020. It is the largest small cap fund in India and manages over Rs 15,323 crore in assets. By betting on stocks of software, chemicals and consumer durables segments, the fund rode the rally well.
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Kotak Small Cap Fund comes next in the list with 198 percent returns. The scheme manages assets worth Rs 4765 crore. Significant exposures to consumer durables, chemicals and industrial products aided the performance.
BOI AXA Small Cap Fund is a tiny fund with just Rs 158 crore in assets. But it managed to deliver 193 percent returns from March 2020. As with other funds, chemicals, consumer durables and healthcare services were key segments that propelled its performance.
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The fifth in terms of returns in this category, Canara Robeco Small Cap, delivered 192 percent. It manages assets of Rs 1242 crore. Exposure to quality Finance sector stocks , apart from the usual pharmaceuticals and chemicals segments drove returns.
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Despite the seemingly stupendous returns delivered by these funds, it is important to note that barring one or utmost two schemes, none managed to match or beat returns of respective benchmarks. The BSE 250 Small Cap TRI, Nifty SmallCap 250 TRI and Nifty Smallcap 100 TRI delivered 201-212 percent returns from the March 2020 market lows, according to data from ACEMF. These funds are not recommendations. Small-cap funds can be volatile. Choose your scheme carefully and take the help if an advisor, if necessary. Taking the SIP route to investing rather than lump-sums may help with such funds.
