Mutual Funds Day 22: Small-Cap Fund

A Mutual Fund that allocates a mandatory 65% of its assets to Small cap companies (251th onwards) is called a small cap mutual fund. Usually, the Mcap of these firms may be lower than 5000 crores, but the valuation is not clearly defined in the regulation as changes in stock prices could change its Mcap.

These companies are riskier than their Large-cap and Mid-cap counterparts, but the prospect of getting multiple returns usually excites the Investors. The volatility and price swings will be very high and to offset that, financial advisors ask investors to keep a longer tenure in mind (eg: 7 to 10 years).

Examples

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