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Fincash » L&T Emerging Businesses Vs HDFC Small Cap Fund

L&T Emerging Businesses Fund Vs HDFC Small Cap Fund

Updated on November 14, 2019 , 1468 views

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

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

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.

L&T Emerging Businesses Fund Vs HDFC Small Cap Fund

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.

Basics 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
BasicsNAV
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
₹22.54 ↓ -0.03   (-0.14 %)
₹5,985 on 30 Sep 19
12 May 14
Equity
Small Cap
2
High
2.68
-0.64
0.95
-1.49
Not Available
0-1 Years (1%),1 Years and above(NIL)
HDFC Small Cap Fund
Growth
Fund Details
₹38.208 ↓ -0.07   (-0.17 %)
₹8,845 on 30 Sep 19
3 Apr 08
Equity
Small Cap
9
Moderately High
2.19
-0.53
1.08
-0.87
Not Available
0-1 Years (1%),1 Years and above(NIL)

Performance Section

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
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
L&T Emerging Businesses Fund
Growth
Fund Details
3%
5.2%
-2.2%
-7.3%
9.6%
11%
15.9%
HDFC Small Cap Fund
Growth
Fund Details
1.5%
1.1%
-6.5%
-8.7%
10.3%
9.3%
12.2%

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Yearly Performance Section

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 Performance2018
2017
2016
2015
2014
L&T Emerging Businesses Fund
Growth
Fund Details
-13.7%
66.5%
10.2%
12.3%
0%
HDFC Small Cap Fund
Growth
Fund Details
-8.1%
60.8%
5.4%
6.4%
51.5%

Other Details Section

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 DetailsMin SIP Investment
Min Investment
Fund Manager
L&T Emerging Businesses Fund
Growth
Fund Details
₹500
₹5,000
S.N. Lahiri - 5.48 Yr.
HDFC Small Cap Fund
Growth
Fund Details
₹500
₹5,000
Chirag Setalvad - 5.27 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
L&T Emerging Businesses Fund
Growth
Fund Details
DateValue
31 Oct 14₹10,000
31 Oct 15₹11,336
31 Oct 16₹14,565
31 Oct 17₹20,482
31 Oct 18₹18,353
31 Oct 19₹17,524
Growth of 10,000 investment over the years.
HDFC Small Cap Fund
Growth
Fund Details
DateValue
31 Oct 14₹10,000
31 Oct 15₹10,952
31 Oct 16₹13,094
31 Oct 17₹17,317
31 Oct 18₹17,389
31 Oct 19₹16,478

Detailed Assets & Holdings Comparison

Asset Allocation
L&T Emerging Businesses Fund
Growth
Fund Details
Asset ClassValue
Cash9.74%
Equity90.05%
Other0.21%
Equity Sector Allocation
SectorValue
Consumer Cyclical22.3%
Basic Materials19.43%
Industrials16.94%
Financial Services7.64%
Technology6.51%
Consumer Defensive5.38%
Real Estate5.08%
Health Care4.29%
Utility2.83%
Energy0.68%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
(A) Tri Party Repo Dealing System (Treps)
CBLO/Reverse Repo | -
9%₹520 Cr
VST Industries Ltd (Consumer Defensive)
Equity, Since 31 Jan 19 | 509966
3%₹193 Cr510,851
↑ 99,081
Mahanagar Gas Ltd (Utilities)
Equity, Since 31 Aug 18 | MGL
3%₹169 Cr1,858,013
↓ -100,000
BEML Ltd (Industrials)
Equity, Since 30 Nov 18 | 500048
2%₹148 Cr1,551,189
Grindwell Norton Ltd (Basic Materials)
Equity, Since 30 Sep 17 | 506076
2%₹142 Cr2,304,201
↑ 4,500
Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Sep 17 | 540762
2%₹133 Cr3,475,561
↑ 3,139
Sanofi India Ltd (Healthcare)
Equity, Since 30 Jun 18 | 500674
2%₹132 Cr225,000
Ramco Cements Ltd (Basic Materials)
Equity, Since 31 May 14 | RAMCOCEM
2%₹128 Cr1,703,901
↓ -41,097
Abbott India Ltd (Healthcare)
Equity, Since 30 Jun 18 | 500488
2%₹125 Cr117,730
↓ -15,200
Persistent Systems Ltd (Technology)
Equity, Since 31 Jul 18 | PERSISTENT
2%₹125 Cr2,185,583
↑ 25,000
Asset Allocation
HDFC Small Cap Fund
Growth
Fund Details
Asset ClassValue
Cash11.25%
Equity88.48%
Debt0.28%
Equity Sector Allocation
SectorValue
Consumer Cyclical25.99%
Industrials13.02%
Technology13.01%
Basic Materials12.2%
Financial Services10.71%
Health Care6.66%
Utility2.28%
Consumer Defensive0.05%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Treps - Tri-Party Repo
CBLO/Reverse Repo | -
10%₹917 Cr
Sonata Software Ltd (Technology)
Equity, Since 31 Oct 17 | 532221
3%₹292 Cr8,810,606
↑ 389,100
DCB Bank Ltd (Financial Services)
Equity, Since 30 Apr 19 | 532772
3%₹272 Cr13,906,886
↑ 262,000
NIIT Technologies Ltd (Technology)
Equity, Since 31 Jul 14 | 532541
3%₹269 Cr1,932,000
INOX Leisure Ltd (Consumer Cyclical)
Equity, Since 31 Jul 18 | 532706
2%₹212 Cr6,405,000
↑ 696,100
Chambal Fertilisers & Chemicals Ltd (Basic Materials)
Equity, Since 28 Feb 18 | 500085
2%₹211 Cr13,697,228
KEI Industries Ltd (Technology)
Equity, Since 30 Sep 17 | 517569
2%₹209 Cr3,850,003
Balkrishna Industries Ltd (Consumer Cyclical)
Equity, Since 30 Nov 18 | BALKRISIND
2%₹208 Cr2,683,447
Kalpataru Power Transmission Ltd (Industrials)
Equity, Since 31 Dec 14 | 522287
2%₹207 Cr4,214,750
↑ 715,100
Bajaj Electricals Ltd (Utilities)
Equity, Since 31 Mar 19 | 500031
2%₹201 Cr5,152,829
↑ 182,600

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.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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