Introduction
Are you looking to generate higher returns that not only give you financial stability but also boost your portfolio? If yes, then you cannot avoid HDFC Small Cap Fund that gives you an opportunity to make high profits.
It is a popular fund in small cap category that focuses on investing in small-sized companies. While large and mid-cap funds more focus on low risk, this small-cap fund aims to provide great returns to investors. If you are an investor who tired of old investments that do not make great returns then this small-cap fund will give you a path to make high returns.
In this article, you will learn about HDFC small-cap fund. Its investment strategy, past returns, and why it is a good investment choice for high growth. Let's get started.
What is the HDFC Small Cap Fund?
The HDFC small-cap fund is an investment type of mutual funds that focus on small-cap companies. It is one of the popular schemes of HDFC Asset Management Company that aims to provide higher returns. The current HDFC small cap fund NAV is 145.43 as of January 2025.
It primarily invests in small-cap companies whose market size is between Rs. 1000 to 5000 crores. These companies size is smaller than compared to large and mid-cap companies but this is what helps to generate higher returns. The small-sized companies generate higher returns because they are in the growth phase. In simple words, these companies are consistently expanding to become large-cap companies. When these companies will grow, you will make high returns that directly make your HDFC small cap fund portfolio strong.
The fund uses diversification to reduce the risk of the investment. It means when you invest in the fund, it spreads your portfolio into different sectors. It helps to reduce the risk and maintain the performance of the HDFC small cap fund portfolio.
The HDFC mutual funds small-cap schemes often target investors who are looking to invest for at least 5-10 years. So if you have long-term investment planning, the fund is a great choice for you.
Who Manage HDFC Small Cap Fund?
The person who manages HDFC small cap fund is Chirag Setalvad. He has 24 years of incredible experience in equity research and fund management. He holds the position of senior fund manager at HDFC Mutual Fund. Along with small-cap fund, he also manages different schemes such as hybrid equity and mid-cap fund.
His investment strategy always helped the fund to achieve high growth even small-cap funds were considered a bit risky compared to large and mid-cap fund. He is the reason behind the growing HDFC small cap fund NAV you are seeing nowadays. focuses on investing in quality companies that can provide great returns. The most important factor that helps him to reduce the risk is long-term investment. Instead of short-term investment, he believes to hold the money for a long duration. It helps to manage losses and increase future profitability.
He earned a respected name in the mutual funds market by providing consistent results. If you are looking to invest for the long-term, his strategies never disappoint you.
What are the Returns of HDFC Small Cap Fund Last 5 Years?
The HDFC small cap fund is known for its growth and higher returns for investors. Its past performance shows how well it performed in the past few years. If you look at its last 5 years performance, it provided 26.99% of annual returns to investors.
It also produced impressive returns in SIP (Systematic Investment Plan) investment. Investors who invested in HDFC small-cap fund through systematic plans generated over 31.05% of returns.
This past performance gives you an idea about how good returns the small-cap fund can generate for you if you focus on long-term investment. It can help you to reduce risk and manage short-term losses.
How to Invest in HDFC Small Cap Fund Via SIP or Lumpsum?
The HDFC small-cap fund is a great choice to generate higher returns compared to large and mid-cap funds. Things that make the fund better is SIP and Lumpsum investment plan. Let's break down both plans and see Which one is a better option for you:
Systematic Investment Plan
It is one of the most popular investment plans that give you an opportunity amount at set times. It helps you to grow your investment over time by investing your desired amount. You can invest through this method by selecting a systematic investment plan at the time of investing in an HDFC small-cap fund.
Lumsum Investment
The Lumsum investment is also called a one-time investment plan that allows you to invest money at once. In simple words, you have to invest a specific amount only one time and it will make returns for you. You can invest in Lumpsum investment by selecting the investment at the time of small-cap investment.
Which one is a better option for you
It is tough to decide which investment plan is better for you because every investor has different needs. To choose the best plan, you should identify what is your investment strategy. If you run a business where you get a large amount at once or you are not sure about your future financial conditions, then you should invest in Lumpsum.
If you are someone who gets a fixed salary or your financial conditions do not allow to invest a large amount at once, then SIP is a better option for you. You can invest a fixed amount at set times and grow your money.
Why is HDFC Small Cap Fund a Good Investment?
Here are a few reasons that make HDFC small-cap fund a good investment:
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Strong Past Performance
If you look at the past returns of the fund, it consistently generated great returns in the long term. Its performance shows how good this small-cap fund can be for you if you invest for at least 5-10 years.
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Well-Diversified Portfolio
The fund diversifies its portfolios into quality companies. Because there is a large number of small-cap companies that exist in the market, it makes it easier to invest in growth-potential companies that can provide high returns.
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High Growth Opportunity
As you know, the fund invests in small-cap companies that are in their growth phase. By investing in growing companies, you create an opportunity to boost your mutual funds return in the future.
Conclusion
In short, the HDFC Small Cap Fund is a great investment choice that gives you a path to become financially strong. If you are looking for a way to make high returns while managing risk and short-term losses, this small-cap fund is a great choice for you.
However, it is risky compared to large and mid-cap funds but you can invest through a SIP to reduce the risk. It allows you to invest a fixed amount at set times and it will grow your investment over time. Because you do not have to invest a large amount at once, you can better manage risk.
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