This Top Rated Small Cap Fund Gave 35.04% Annualised Returns On 3 Years SIP, Good To Invest

Small-cap stocks are typically viewed by investors as high-return wagers. These, however, are also extremely volatile, so in order to profit from them, one must purchase them at a time when the economy is growing and at a low price. One of these small-cap funds is a Bank Of India Small Cap Fund. It is an equity mutual fund from the house of Bank Of India Mutual Fund (formally known as BOI AXA Mutual Fund). The fund is turning 4 on 19 December 2018, its inception day. This fund has offered decent returns in 3 years. However, despite having offered decent returns over the past three years, small-cap equities funds have seen considerable volatility and a faster-than-average increase in corpus sizes. Below are the key details of the scheme:

Bank Of India Small Cap Fund

Bank Of India Small Cap Fund is an open-ended equity fund that predominantly invests in small-cap stocks. It is a small fund of its category with no lock. It has been rated 4 stars by CRISIL and Value Research, respectively. As the fund is an equity fund, it is a very high-risk fund for investments, however, it has given good returns since its inception.

Under the Direct Plan-Growth option of the fund, its recently declared Net Asset Value (NAV) on 30 November 2022 is Rs 29.3600. Its Assets Under Management (AUM) are worth Rs 395 crore as of October 31, 2022. The benchmark of the fund is NIFTY Smallcap 250.

 
The investment objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of small-cap companies. However, there can be no assurance that the investment objectives of the Scheme will be realized. It invests predominantly in equity and equity-related securities of small-cap companies. 

Under normal market conditions, the fund will invest 65% to 100% of assets in a diversified portfolio constituting equity and equity-related instruments of small-cap companies with sustainable business models, and potential for capital appreciation. The fund has the flexibility to invest up to 35% of its assets in equity and equity-related instruments of companies other than small-cap companies.

Investment Details

A monthly SIP of Rs 2000 in this fund with Rs 2000 upfront investments would i.e. Rs 4,60,000 in 3 years would turn into a total of Rs 8,91,112 i.e. 39.09% annualised returns in 3 years.

• Minimum Investment - Rs 5,000
• Minimum Additional Investment - Rs 1,000
• Minimum Withdrawal - Rs 1,000
• Minimum SIP Investment - Rs 1,000
• Minimum withdrawal - Rs 100
• Exit Load -For units in excess of 10% of the investment,1% will be charged for redemption within 365 days.
• Expense Ratio - 0.51% as on 31 October 2022

Annualised Returns

Lump-Sum Investment Returns

Since its inception, the fund (Direct-Growth) has given a 29.04% average annual average return, which is almost double the category average return of 17.77%. It has also given above average among its peers. Also, in 3 years, it outperformed the category average returns. 

Investment Tenure	Returns
1 Year	6.58%
2 Year	34.63%
3 Year	38.58%

Returns on SIP

SIP Tenure	Returns
1 Year	12.33%
2 Year	20.67%
3 Year	35.04%

Portfolio

The fund has 94.1% investments in domestic equities and 5.86% in cash & cash equivalent instruments and the rest 0.04% in debt. The majority of equity investments are in small-cap stocks (59.7%), followed by Mid-cap stocks (10.27%), and large-cap stocks (5.32%). It has invested in total 65 stocks and in total 14 sectors.

Among the invested sectors, the top 10 include Capital Goods, Financial, Materials, Automobile, Chemicals, Services, Metal & Mining, Construction, Textile, and Healthcare. Whereas, the top 10 holdings of the fund include ICICI Bank, Timken India, City Union Bank, The phoenix Mills, Ratnamani Metals & Tubes, Tube Investments of India, Shanthi Gears, Rolex Rings, JB Chemicals & Pharmaceuticals, and Vedant Fashion.

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related Terms and Conditions carefully before investing. The above-mentioned information is purely informational and doesn't guarantee any return. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.