7 Small-Cap Schemes That Have Returned Up To 47% In 1 Year

Small-cap focused mutual fund schemes offer a lucrative way of investing in the equity market for high returns. Additionally, small-cap schemes offer a relatively low-risk way of investing in small-cap stocks compared to directly purchasing such stocks.

The Securities Exchange Board of India (Sebi) categorises small-cap schemes as ones which allocate 65 per cent of their total investment in small-cap stocks. Stocks which are ranked beyond 250 in terms of market capitalisation are called small-cap stocks.

A report by Ventura Securities titled Are Small Cap Funds Risky? found that 22 out of 23 small-cap schemes in India have outperformed the Nifty500 index in terms of 1-year returns. The Nifty500 Index has rallied 19.7 per cent in a year.

The beta of these schemes ranged between 0.66 and 0.93. Beta represents the volatility or systematic risk of a security or portfolio compared to the market. A higher Beta denotes a higher degree of risk and an increased possibility of returns. On the other hand, a lower Beta might offer more stability, but relatively lower returns.

Here’s a look at the top-performing small-cap schemes on the basis of their 1-year returns:

Bandhan Bank Small Cap Scheme

Bandhan Bank’s small-cap scheme has given returns of 47.7 per cent in a year. The scheme’s compounded annual growth rate (CAGR) on a three-year basis is 30 per cent. The scheme had a beta of 0.9, denoting a relatively higher degree of risk.

LIC Small Cap Scheme

Life Insurance Corporation’s (LIC’s) small-cap scheme has given returns of 41.7 per cent in a year. On a three-year basis, the scheme’s CAGR was 25.7 per cent. The scheme has a beta of 0.79, indicating a medium-to-high degree of risk

Invesco India Small Cap Scheme

Invesco India Small Cap Scheme gave returns of 41.6 per cent in a year. The three-year CAGR of the scheme stood at 27.5 per cent. The beta of the scheme is 0.75, indicating a medium-to-high degree of risk.

ITI Small Cap Scheme

ITI Mutual Fund’s small-cap scheme has a CAGR of 38.3 per cent on a 1-year basis. The three-year CAR of the scheme was 25.8 per cent. The beta of the scheme is 0.75, indicating medium-to-high degree of risk.

Bank of India Small Cap Scheme

Bank of India’s small-cap scheme gave annual returns of 33.6 per cent in a year. On a three-year basis, the CAGR of the scheme was 24.4 per cent. The beta of the scheme is 0.8, indicating a relatively high degree of risk.

Tata Small Cap Scheme

Tata Mutual Fund’s small-cap scheme gave returns of 35.1 per cent in a year. The scheme gave returns of 26.2 per cent on a three-year basis. The beta of the scheme is 0.69, indicating a low-to-medium degree of risk.

HSBC Small Small Cap Scheme

HSBC Asset Management (India)’s small-cap scheme has given returns of 32.3 per cent in a year. The three-year CAGR of the scheme was 26.8 per cent. The beta of the scheme is 0.93, denoting a relatively high degree of risk.