Is it safe to invest in small cap funds?

Is it a good idea to invest in small-cap funds?

Smallcap funds can provide an opportunity for growth by selecting such well managed smallcap companies. So if you have a decent risk appetite, smallcap funds might be ideal for you. Smallcap funds are suitable to achieve long term financial goals and it would be smart to include them in your portfolio.

Is it safe to invest in small-cap mutual fund?

Aligning investors’ risk appetite with the smallcaps: Smallcaps are volatile and associated with high risk. So, only investors with a high risk appetite and an investment horizon of at least 5 years should invest in them. Staying invested in small caps for the long term is important to benefit from their potential.

Is small-cap high risk?

Since smallcap funds are high-risk investments, investors with similar levels of risk tolerance levels can invest. Also, it is important to have a long term investment horizon to be able to average out the market volatility.

Why are small-cap funds risky?

Small-cap funds have periods of massive gains and falls. Therefore, experts say they might not be right for investors who follow the invest and hold strategy. Small-cap funds are known to perform well in a bull-run market. They also steeply crash when the markets fall.

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Which is best small-cap fund?

Top 10 Small Cap Mutual Funds

Fund Name Category 1Y Returns
Nippon India Small Cap Fund Equity 96.5%
Edelweiss Small Cap Fund Equity 90.2%
Canara Robeco Small Cap Fund Equity 96.0%
ICICI Prudential Small Cap Fund Equity 97.4%

Is SBI small-cap fund good?

SBI Small Cap Fund is a well-managed small-cap fund known for picking high conviction multibagger stocks. SBI Small Cap Fund has shown superior performance across market phases and cycles in the past. It has managed to significantly outperform the benchmark and the category average during bull and bear market phases.

Will small caps recover?

While the fund’s 1.3% expense ratio is above average, its 19% return over the last three years has beaten 70% of its peers, according to Morningstar.

Name Fidelity Small Cap Value
Ticker FCPVX
YTD Return % 31.7
3 YR Return (%) 12.8
Expense ratio (%) 0.96

Is small-cap a good investment for long-term?

Small-Cap Funds are better in the long-term

Therefore, when the market slumps, these stocks are probably the worse-affected. Hence, it is important to have a long-term investment window while investing in Small-Cap Funds so that you give sufficient time to your investment to generate returns.