Table of Contents
L&T Emerging Businesses Fund and HDFC Small Cap Fund both form part of small-cap Mutual Fund schemes. Small cap funds are the ones who invest their corpus in shares of companies having corpus amount of less than INR 500 crores. Small-cap funds form the bottom of the pyramid when schemes are classified on the Basis of Market capitalization. These schemes have a high-risk and are considered good Income earners in the long-run. These schemes generally have a low share price thereby; individuals can purchase larger quantities of these shares. Though both L&T Emerging Businesses Fund and HDFC Small Cap Fund belong to the same category yet; they differ on various parameters such as NAV, performance, and so on. So, let us understand the differences between both the schemes.
L&T Emerging Businesses Fund is managed by L&T Mutual Fund. This scheme was launched in the year 2014 and is an open-ended scheme. The scheme invests its corpus predominantly in equity-related of small-cap companies. Through its investments, it tries to attain Capital growth in the long-term. The scheme uses BSE S&P Small Cap Index to construct its Portfolio. L&T Emerging Businesses Fund is managed jointly by Mr. Karan Desai and Mr. S. N. Lahiri. As on April 10, 2018, some of the top holdings of L&T Emerging Business Fund include HEG Limited, Lakshmi Machine Works Limited, Ramco Cements Limited, Ipca Laboratories limited, and Nocil Limited. The scheme is suitable for investors who have a high-risk appetite and wish to earn more by Investing in shares of small-cap companies.
HDFC Small Cap Fund is an open-ended Mutual Fund scheme offered by HDFC Mutual Fund under small cap category. This scheme was launched on April 03, 2008. The objective of the scheme is to generate capital growth in the long-term by primarily investing in shares of small-cap companies. The scheme uses Nifty Small Cap 100 as its benchmark index to construct its portfolio. It also uses NIFTY 50 as an additional index. The fund managers managing the HDFC Small Cap Fund are Mr. Chirag Setalvad and Mr. Rakesh Vyas. As on March 31, 2018, some of the top holdings of HDFC Small Cap Fund’s portfolio consisted of Sonata Software Limited, SKF India Limited, Tata Metaliks Limited, and Aurobindo Pharma Limited.
Though both L&T Emerging Businesses Fund and HDFC Small Cap Fund belong to the same category of small-cap funds yet, there exists differences between both the schemes. So, let us understand the differences between both the schemes that are divided into four sections, namely, Basics Section, Performance Section, Yearly Performance Section, and Other Details Section.
The basics section is the first one in the comparison of both the schemes. The parameters that form part of this scheme includes scheme category, Fincash Ratings, and Current NAV. To begin with the scheme category, it can be said that both the schemes belong to the same category, that is, Equity Mid & Small-Cap. With respect to Fincash Ratings, it can be said that L&T Emerging Businesses Fund is a 5-Star scheme while HDFC Small Cap Fund is a 4-Star Fund. The comparison of Current NAV between both the schemes portrays that HDFC Small Cap Fund leads the race. As on April 09, 2018, the NAV of L&T Emerging Businesses Fund was approximately INR 27 while the NAV of HDFC Small Cap Fund was approximately INR 46. The table given below summarizes the comparison of both the schemes.
Parameters Basics NAV Net Assets (Cr) Launch Date Rating Category Sub Cat. Category Rank Risk Expense Ratio Sharpe Ratio Information Ratio Alpha Ratio Benchmark Exit Load L&T Emerging Businesses Fund
Growth
Fund Details ₹59.5566 ↑ 0.57 (0.97 %) ₹10,766 on 31 Jul 23 12 May 14 ☆☆☆☆☆ Equity Small Cap 2 High 1.84 2.19 1.01 7.44 Not Available 0-1 Years (1%),1 Years and above(NIL) HDFC Small Cap Fund
Growth
Fund Details ₹101.791 ↑ 0.68 (0.67 %) ₹21,067 on 31 Jul 23 3 Apr 08 ☆☆☆☆ Equity Small Cap 9 Moderately High 1.82 2.77 0 0 Not Available 0-1 Years (1%),1 Years and above(NIL)
The performance section compares the Compounded Annual Growth Rate or CAGR between both the schemes. This CAGR is compared at different time intervals, namely, 3 Month Return, 6 Month Return, 3 Year Return, 5 Year Return, and Return Since Inception. A holistic comparison of both the schemes shows that HDFC Small Cap Fund leads the race. However, at a certain time interval, even, L&T Emerging Businesses Fund has done well. With respect to 5 Year Returns, there is no data in the column of L&T Emerging Business Fund since the scheme was launched in the year 2014 and has not completed 5 years. The summary comparison of performance section is tabulated as follows.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch L&T Emerging Businesses Fund
Growth
Fund Details 4.9% 15.7% 25.9% 31.5% 40.1% 17.1% 21.2% HDFC Small Cap Fund
Growth
Fund Details 3.5% 16.4% 28.1% 39.6% 38.9% 17.7% 16.3%
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It is the third section, in the comparison between both the schemes. In this section, the absolute returns of both the schemes are compared. A comparison of this scheme shows that L&T Emerging Business Fund leads the race in many instances. The summary of yearly performance section is as follows.
Parameters Yearly Performance 2022 2021 2020 2019 2018 L&T Emerging Businesses Fund
Growth
Fund Details 1% 77.4% 15.5% -8.1% -13.7% HDFC Small Cap Fund
Growth
Fund Details 4.6% 64.9% 20.2% -9.5% -8.1%
It is the last section in the comparison between both the schemes. The comparable elements forming part of other details section include Minimum SIP and Lumpsum investment, AUM, exit load, and others. With respect to minimum SIP investment, it can be said that in both the schemes, the minimum SIP amount is same, that is INR 500. Likewise, that minimum lumpsum amount is also same for both the schemes that is INR 5,000. The comparison of AUM between both the schemes shows that there is a significant difference between both of them. As on February 28, 2018, the AUM of L&T Emerging Businesses Fund was INR 4,286 crores while the AUM of HDFC Small Cap Fund was INR 2,670 crores. The table given below summarizes the comparison of both the schemes.
Parameters Other Details Min SIP Investment Min Investment Fund Manager L&T Emerging Businesses Fund
Growth
Fund Details ₹500 ₹5,000 Venugopal Manghat - 3.71 Yr. HDFC Small Cap Fund
Growth
Fund Details ₹300 ₹5,000 Chirag Setalvad - 9.18 Yr.
L&T Emerging Businesses Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹7,863 31 Aug 20 ₹7,732 31 Aug 21 ₹14,721 31 Aug 22 ₹17,119 31 Aug 23 ₹22,561 HDFC Small Cap Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹8,112 31 Aug 20 ₹8,105 31 Aug 21 ₹15,033 31 Aug 22 ₹16,360 31 Aug 23 ₹22,517
L&T Emerging Businesses Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 1.39% Equity 98.61% Equity Sector Allocation
Sector Value Industrials 38.61% Basic Materials 15.76% Consumer Cyclical 14.81% Technology 8.9% Financial Services 6.45% Real Estate 5.71% Consumer Defensive 3.71% Health Care 3.53% Energy 1.13% Top Securities Holdings / Portfolio
Name Holding Value Quantity Apar Industries Ltd (Industrials)
Equity, Since 31 Mar 17 | APARINDS3% ₹379 Cr 756,017
↓ -65,000 K.P.R. Mill Ltd (Consumer Cyclical)
Equity, Since 28 Feb 15 | KPRMILL3% ₹377 Cr 4,981,639 KEI Industries Ltd (Industrials)
Equity, Since 31 Jan 20 | KEI3% ₹295 Cr 1,090,358
↓ -158,330 Cera Sanitaryware Ltd (Industrials)
Equity, Since 31 Mar 19 | CERA3% ₹289 Cr 304,220
↓ -5,000 APL Apollo Tubes Ltd (Basic Materials)
Equity, Since 31 Oct 20 | APLAPOLLO2% ₹266 Cr 1,588,905 EIH Ltd (Consumer Cyclical)
Equity, Since 31 May 17 | 5008402% ₹265 Cr 10,664,200 KPIT Technologies Ltd (Technology)
Equity, Since 30 Sep 21 | KPITTECH2% ₹257 Cr 2,188,200 Sonata Software Ltd (Technology)
Equity, Since 31 Jul 18 | SONATSOFTW2% ₹256 Cr 2,448,245 Carborundum Universal Ltd (Industrials)
Equity, Since 31 Jul 16 | CARBORUNIV2% ₹244 Cr 2,149,700
↓ -100,000 Mahindra Lifespace Developers Ltd (Real Estate)
Equity, Since 31 Jul 21 | MAHLIFE2% ₹241 Cr 4,242,200 HDFC Small Cap Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 6.39% Equity 93.61% Equity Sector Allocation
Sector Value Industrials 27.08% Consumer Cyclical 20.56% Financial Services 12.05% Technology 11.29% Health Care 10.59% Basic Materials 6.28% Consumer Defensive 3.33% Communication Services 2.42% Top Securities Holdings / Portfolio
Name Holding Value Quantity Sonata Software Ltd Shs Dematerialised (Technology)
Equity, Since 31 Oct 17 | SONATSOFTW4% ₹979 Cr 9,367,459
↑ 258,130 Bank of Baroda (Financial Services)
Equity, Since 31 Mar 19 | 5321344% ₹802 Cr 42,828,792
↑ 1,000,000 Firstsource Solutions Ltd Shs Dematerialised (Technology)
Equity, Since 31 Mar 18 | FSL4% ₹801 Cr 49,076,294
↑ 248,734 Bajaj Electricals Ltd (Consumer Cyclical)
Equity, Since 31 Mar 19 | BAJAJELEC3% ₹644 Cr 5,545,822 IDFC Ltd (Financial Services)
Equity, Since 31 Oct 21 | IDFC3% ₹628 Cr 51,571,544 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 30 Jun 19 | ASTERDM2% ₹553 Cr 16,680,886 eClerx Services Ltd (Technology)
Equity, Since 31 Mar 18 | ECLERX2% ₹549 Cr 3,382,112
↑ 147,220 SKF India Ltd Shs Dematerialised (Industrials)
Equity, Since 31 Jul 14 | SKFINDIA2% ₹544 Cr 1,044,491
↑ 2,166 KEI Industries Ltd (Industrials)
Equity, Since 30 Sep 17 | KEI2% ₹521 Cr 1,926,026
↓ -50,000 Power Mech Projects Ltd (Industrials)
Equity, Since 31 Aug 15 | POWERMECH2% ₹513 Cr 1,215,078
↓ -3,577
To conclude, it can be said that, there exists a difference between both the schemes. However, individuals should be careful while in any of the Mutual Fund scheme. They should understand its functioning completely and even check if it matches with their investment objective or not. Individuals can also consider the opinion of a financial advisor if they have any queries. This will help investors to attain their goals on time and in a hassle-free manner.