SBI Small Cap Fund – Good or Bad for My Portfolio?

It is really interesting to see how diverse the investor community has become. People from all walks of life are showing interest in mutual fund investing, putting their discrete requests before the AMCs thus forcing them to launch products tailored according to their needs.

While it is obvious that what may be suitable for an investor may not work for another, it is important to know which parameters help us detect such qualities. Today, we are going to review SBI Small Cap Fund, which is one of the bestselling small cap fund in India. The details are brought to you by the expert reviewer of MySIPonline, who preserve vast experience in fund analysis and investment guidance.

Taking the Basics

1. The Fund House : SBI Small Cap Fund (G) is one of the many top performing funds issued by the fifth largest asset management company in India, SBI Mutual Fund. This AMC is known for its commendable contribution towards changing the face of the Indian investment industry, and is also credited for bridging the gap between investors and better opportunities. 
2. Scheme Type : SBI Small Cap Fund – Regular Plan (G), as apparent from its name, is an equity oriented, open-ended mutual fund. Being an open-ended scheme, the fund has the freedom to transact in shares at any time of the year. However, investors do not have any direct participation in buying shares, as the same is merged in the units obtained by them of the fund. 
3. Fund Objective : The primary objective with which SBI Small Cap was launched in the market was to provide a platform to the investors to invest in avenues that could help them magnify their riches and achieve their long-term goals. 
4. Current Wealth : Operating in the market since 2009, SBI Small Cap Fund Growth has successfully managed to garner a huge wealth from its subscribers. Today, the fund stands worth ₹1, 992 crore as recorded from the files dated 30th April 2019.

Discussing the Suitability

Small caps are aggressive in nature. In fact, their volatility factor tends to be the highest among all other products of equity nature. Hence, it is advised that investors should do a thorough introspection of their profile before panning any investment in SBI Small Cap Fund. You can follow these tips to know if this fund suits you: -

• Check the Past Performance : As told earlier, SBI Small Cap is a volatile fund owing to its inherit portfolio dabbed with small cap stocks. Hence, the past performance is quite unstable. There have been instances where the fund has skyrocketed yielding 60% returns; and there have been times when the performance has slipped to 6.5% returns. So, if you’re ok with this oscillation, then you’re good to go!
• Check the Investment Philosophy : The investment philosophy adopted at SBI Small Cap Fund (G) is very dynamic. Though it is biased towards small caps (57.36%), considerable preference has been given to other stocks such as mid-caps (37.58%) and others. This mix of stocks ensures that the fund doesn’t get hurt by excess risk, and everything stays under control.
• Give a Cursory Look at the Top Holdings : The top 10 stocks of the fund hold about 36% of the wealth of the assets. These stocks belong to rising industries such as FMCG, Engineering, Financial & Banking, and Textiles. These industries together construct a robust pool of assets working together for a common goal. 

So, if you’re okay with some risk in return for a good reward, then SBI Small Cap Fund (G) is definitely a good plan for your portfolio. In case you need more assistance, feel free to call MySIPonline. We’re here to help!