Small-Cap Mutual Funds are one of the most popular mutual funds. Though Small Cap Mutual Funds are risky the return is also huge in this fund. Before you invest you should know what the best small-cap mutual fund 2019 is. Here we will give you a list of top five small-cap mutual funds. Small-Cap funds have given negative returns over the last year but if you are investing in equity you must remember that you have to invest in small-cap funds at least for five years. Before you invest in the best small-cap mutual fund 2019 you should set some parameters to choose them.
How to choose the best small-cap mutual funds in 2019?
- Performance and risk analysis
You must check the small-cap fund’s performance before invest one in. You must check if that small-cap fund is giving regular return or not. If a fund has a high return that doesn’t always mean that fund will be worth of the best small-cap mutual fund. You should check if that small-cap fund is giving regular return or not. The rolling returns of that small-cap fund also should be checked for periods such as one year, three years and five years. You also have to check on risk-reward ratios like sharp ratio, Sortino ratio, and standard deviation over a 3 year period.
- The calculation to check for the consistency in the last three years
“H” is used for calculating the consistency of fund. The full form of “H” is Hurst Exponent. To measure the randomness of NAV series of a fund the “H” is an exponent. If a fund has high “H” that fund tends to exhibit low volatility compared to funds with low “H”.
- If “H” = 0.5, the return of that series is said to be a geometric Brownian time series. These types of series are difficult to forecast.
- If the “H” is less than 0.5, the series is called to be mean-reverting.
- If the “H” is greater than 0.5 the series is called to be persistent. The larger the value of “H” the stronger will be the trend of the series.
The benchmark of a fund is most important you must check if that small-cap fund is performing over its benchmark or not. So if you saw it is performing under its benchmark you should not invest in that fund.
- Fund Portfolio
The fund you are currently investing or planning to invest in you must check the portfolio of that fund. If that fund has a well-diversified portfolio or not. The exposure to the top 10 holdings should be ideally under 50%.
- Expense Ratio
Also, important things before you opt for the best small-cap mutual funds to invest in 2019 are the expense ratio. The expense ratio of a fund should not cross more than 3% if you see any fund which has an expense ratio of more than 3% you should not invest in that fund.
Top 5 small-cap mutual fund
|Name of that Fund||Launch date||Three years||Five Years||Ten Years||Return since launch|
|SBI Small Cap Fund||9th September 2009||11.42%||18.47%||–||17.24%|
|HDFC Small Cap Fund||3rd April 2008||10.21%||12.98%||14.10%||12.79%|
|Reliance Small Cap||16th September 2010||8.96%||13.87%||–||15.67%|
|L&T Emerging Business Fund||12th May 2014||9.64%||13.38%||–||16.47%|
|Axis Small Cap Fund||29th November||9.69%||12.98%||–||20.01%|