L&T Emerging Businesses Fund Vs Aditya Birla Sun Life Small Cap Fund

L&T Emerging Businesses Fund and Aditya Birla Sun Life Small Cap Fund both the schemes belong to the same category of small-cap fund. In short, Small cap funds are the schemes that invest the corpus in the shares of companies whose market capitalization is less than INR 500 Crores. These companies are generally start-ups or are in their nascent stages of development. These companies are considered to have good growth potentials and chances to generate good returns in the long-run. Though both L&T Emerging Businesses Fund and ABSL Small Cap Fund belong to the same category, nevertheless; they differ on account of various parameters. So, let’s understand the differences between both the schemes.

L&T Emerging Businesses Fund

This scheme of L&T Mutual Fund was incepted on May 13, 2014, and is offered under the small-cap category. The investment objective of this scheme is to generate long-term capital growth from a diversified Portfolio consisting of equity-related securities predominantly focusing on small-cap companies. Mr. S. N. Lahiri and Mr. Karan Desai are the Fund managers managing the L&T Emerging Businesses Fund. L&T Emerging Businesses Fund uses S&P BSE Small Cap TRI Index as its yardstick to construct its portfolio. Based on the scheme’s Asset Allocation, it invests around 50-100% in equity and equity-related instruments of small cap companies while the remaining in fixed income and money market instruments. Some of the key benefits of L&T Emerging Businesses Fund include style diversifier, suitable for investors seeking higher returns, and an experienced investment team.

Aditya Birla Sun Life Small Cap Fund (Erstwhile Aditya Birla Sun Life Small & Midcap Fund)

Aditya Birla Sun Life Small Cap Fund (earlier known as Aditya Birla Sun Life Small & Midcap Fund) is managed and offered by Aditya Birla Sun Life Mutual Fund under the small-cap category. This scheme was launched on May 30, 2007. The objective of this scheme is to attain growth and appreciation in capital by Investing in equity and equity-related instruments of companies belonging to the small and mid-cap sector. Mr. Jayesh Gandhi is the sole fund manager managing the ABSL Small Cap Fund. As on March 31, 2018, some of the top holdings of this Birla Sun Life Mutual Fund’s scheme include Johnson Controls, CG Power & Industrial Solutions Limited, Gujrat State Petronet Limited, and Tata Metaliks Limited. This scheme is suitable for individuals seeking for long-term capital growth by investing in equity and equity-related instruments of small cap companies.

L&T Emerging Businesses Fund Vs Aditya Birla Sun Life Small Cap Fund

Though both the schemes belong to the same category, yet; they differ on account of numerous parameters. So, let’s understand the differences between these schemes by comparing the parameters that are divided into four sections, namely, basics section, performance section, yearly performance section, and other details section.

Basics Section

Current NAV, Fincash Rating, and scheme category are some of the elements that form part of the basics section. 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. The comparison of current NAV reveals that there is a significant difference between the NAV of both the schemes. As on April 24, 2018, the NAV of L&T Emerging Businesses Fund was approximately INR 28 while of ABSL Small Cap Scheme was nearly INR 42. With respect to Fincash Rating, it can be said that, both the schemes are rated as 5-Star Schemes. The table given below shows the summary comparison of the basics section.

Performance Section

The comparison of Compounded Annual Growth Rate or CAGR returns is done in the performance section. These returns are compared at different intervals such as 3 Month Return, 1 Year Return, 3 Year Return, and 5 Year Return. The comparison of CAGR returns reveals that, in most of the instances, the returns generated by L&T Emerging Businesses Fund is higher than the performance of ABSL Small Cap Fund. The table given below shows the summary comparison of the performance section.

Yearly Performance Section

Yearly Performance section is the third section in the comparison of both the schemes. It analyses the difference in the absolute returns generated by both the schemes for a particular year. The comparison of absolute returns also reveals that in most instances, L&T Emerging Businesses Fund has done well. The summarized comparison of the yearly performance section is tabulated as follows.

Other Details Section

It is the last section in the comparison of both the schemes. The comparable elements that form part of other details section include AUM, minimum SIP investment, and minimum lumpsum investment. The comparison of AUM reveals that both the schemes differ on account of AUM. As on March 31, 2018, the AUM of L&T Emerging Businesses Fund was around INR 4,404 Crores while of Aditya Birla Sun Life Small Cap Fund was nearly INR 2,089 Crores. It can be said that both the schemes also differ on account of minimum SIP and lumpsum investment. With respect to minimum SIP amount, in case of L&T Mutual Fund, it is INR 500 while for ABSL Mutual Fund, it is INR 1,000. In the same manner, the minimum lumpsum amount for L&T’s scheme is INR 5,000 while for ABSL’s scheme is INR 1,000. The table given below summarizes the comparison of other details section.

Growth of 10k Investments over the years