Mumbai
This article is about small caps, with examples of different small caps. Various fund managers and analysts have said a lot at different times in this regard, out of which we are highlighting five.
The general investor's curiosity about small caps is long-standing. The practice of how small capitalization companies grow and prosper has been around for a long time. The number of companies that have been able to do good business in the larger field after many days of being identified as small is not small. In this context, what is the role of Small Cap Fund? Before we start discussing this, let me tell you that the main purpose of such funds is 'Capital Appreciation'. Fund managers keep a 'diversified' portfolio, scattering their assets in various sectors of the economy.
Let me give you an example. We have chosen Kotak Small Cap Fund without any bias. You will find its latest performance in the side list.
It is worth mentioning that this fund of Kotak has been launched since February 2005. If you look at it from the beginning, you will see a return of about 23%. Of course, the return of the past will never be found in the future, the warning is repeated. Almost all asset management companies manage their own small cap funds. The ones that are better than the average are listed below:
- AXIS Small Cap
- Invesco India Small Cap
- BOI AXA Small Cap
- Kotak Small Cap
- Nippon India Small Cap
See also this example: Franklin India Smaller Companies Fund. Its one, three and five year returns, respectively: 52.23%, 21.62% and 15.46%.
We are not saying that these stocks must be in your portfolio. But you can keep an eye on them in the future, maybe the companies will grow along with the good results. As an investor, however, the responsibility to verify will remain. Talk to the broker, if you have to buy, decide at what price you should buy. If you do not want to buy directly, see which stocks are in a small cap fund. Don't decide to do something without understanding your own 'risk'.
If you want to create your own small cap portfolio, you have to look at it very carefully. Verify the P/E of each selected stock. Is the profit visible in the coming days? Try to find the answer to this question. Find out how the company is doing in its case, whether it is able to pay dividends, whether it is able to grow its business. You will find all kinds of corporate information on the National Stock Exchange. Practice how the share price is going in the secondary market, at what price you can make a profit. Your broker will help you a lot in this regard.
Corporate correspondent
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