Thanks to the post-Covid bull run in equity markets, several individual stocks and equity mutual funds gave above average returns to investors in Financial Years 2020-2021 and great returns in Financial Years 2021-2022. Small-cap stocks usually have a higher risk profile than blue-chips but tend to give higher returns, especially during a bull market.
In the small-cap category, Canara Robeco Small Cap Fund clocked Compounded Annual Growth Returns (CAGR) of 38% in the last three years, which is higher than average 30% returns delivered by funds in the category.
The fund, rated five stars by Value Research, is an open-ended equity scheme predominantly investing in small cap stocks.
According to Canara Robeco website, the investment objective of the small-cap mutual fund scheme is to generate capital appreciation by investing predominantly in small cap stocks. As of September 30, the fund had allocated 69.52% of into small caps, 23.02% into mid-caps and 7.73% into large-caps.
An SIP of Rs 10,000 in this mutual fund started 1 year ago would have accumulated to Rs 1.27 lakh on an overall investment of Rs 1,20,000. An SIP of equal amount started 2 years ago would be worth Rs 3.18 lakh against a total investment of Rs 2.40 lakh. Similarly an SIP of Rs 10,000 per month started 3 years ago would have accumulated to Rs 6.34 lakh against an investment of Rs 3.60 lakh.
City Union Bank Ltd, Schaeffler India Ltd, Cera Sanitaryware Ltd, Indian Hotels Co Ltd, Century Textile & Industries Ltd, Grindwell Norton Ltd, Creditaccess Grameen Ltd, Can Fin Homes Ltd, Aditya Birla Fashion and Retail Ltd and Timken India Ltd were the top 10 holdings of the fund as of September 20.
The fund allows a lump sum investment of Rs 5000 and in multiples of Re 1 thereafter. Subsequent purchases: Minimum amount of Rs 1000 and multiples of Re 1 thereafter. For SIP, any date or monthly frequency can be chosen to make payments from– Rs 1000 and in multiples of Re 1 thereafter. For quarterly frequency – Rs 2000 and in multiples of Re 1 thereafter.
