Bad return of SmallCap Fund: The stock market has been volatile since reaching a new high in September last year. The maximum impact of the sell-off in the market is being seen in the retail segment. The BSE Smallcap index has fallen nearly 4 per cent in the last six months. At the same time, it has fallen more than 10 percent in a year. The decline in the smallcap segment is also affecting the returns of smallcap mutual fund schemes. In the last 6 months, more than 15 Smolicap funds have inflicted losses of around 10-18% to investors.
Due to market fluctuations, the return of the Smolcap fund has deteriorated.
Based on the returns of the last 6 months amid the ongoing fluctuations in the stock market, the performance of small cap mutual funds has been poor. A total of 19 schemes have seen a decline of 10-18% in returns. Mire Asset Nifty Smallcap 250 Momentum Quality 100 ETF FOF has suffered the highest loss of 17.27%. At the same time, Edelweiss Nifty Smallcap 250 Index Fund has the lowest loss of 10.25%.
Smallcap funds invest at least 65% of their total assets (AUMs) in stocks and related investments of smallcap companies. These companies are likely to grow rapidly. They have high volatility and risk as these companies are in the early stages of their development.
The stock market has been volatile since reaching a new high in September last year. The maximum impact of the sell-off in the market is being seen in the retail segment. The BSE Smallcap index has fallen nearly 4 per cent in the last six months. At the same time, it has fallen more than 10 percent in a year. The decline in the smallcap segment is also affecting the returns of smallcap mutual fund schemes. In the last 6 months, more than 15 Smolicap funds have inflicted losses of around 10-18% to investors.
Due to market fluctuations, the return of the Smolcap fund has deteriorated.
Based on the returns of the last 6 months amid the ongoing fluctuations in the stock market, the performance of small cap mutual funds has been poor. A total of 19 schemes have seen a decline of 10-18% in returns. Mire Asset Nifty Smallcap 250 Momentum Quality 100 ETF FOF has suffered the highest loss of 17.27%. At the same time, Edelweiss Nifty Smallcap 250 Index Fund has the lowest loss of 10.25%.
Smallcap funds invest at least 65% of their total assets (AUMs) in stocks and related investments of smallcap companies. These companies are likely to grow rapidly. They have high volatility and risk as these companies are in the early stages of their development.
What is the reason for the decline in small cap mutual funds?
Mohit Gang, MD and CEO of MoneyFront, explains that smallcap funds are always for investors who are looking for high returns with high risk. Their nature is more volatile than large-cap stocks. The impact of a broader market decline is greater on most small cap stocks because these stocks are less fluid. In such a situation, even the slightest selling pressure can lead to major losses. This is the reason why some smallcap funds have seen a big decline recently.
