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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.
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 (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.
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.
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.
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 ₹51.3412 ↑ 0.10 (0.19 %) ₹8,672 on 31 Jan 23 12 May 14 ☆☆☆☆☆ Equity Small Cap 2 High 1.87 -0.15 0.61 3.77 Not Available 0-1 Years (1%),1 Years and above(NIL) Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details ₹55.6145 ↑ 0.07 (0.13 %) ₹3,034 on 30 Apr 23 31 May 07 ☆☆☆☆☆ Equity Small Cap 1 Moderately High 2.13 -0.25 0 0 Not Available 0-365 Days (1%),365 Days and above(NIL)
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.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch L&T Emerging Businesses Fund
Growth
Fund Details 5.1% 8.9% 8.1% 27.1% 48% 13.6% 19.8% Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details 8.4% 9.8% 6.3% 20.3% 38% 6.4% 11.2%
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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.
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% Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details -6.5% 51.4% 19.8% -11.5% -22.6%
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.
Parameters Other Details Min SIP Investment Min Investment Fund Manager L&T Emerging Businesses Fund
Growth
Fund Details ₹500 ₹5,000 Venugopal Manghat - 3.37 Yr. Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details ₹1,000 ₹1,000 Vishal Gajwani - 1.08 Yr.
L&T Emerging Businesses Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹8,416 30 Apr 20 ₹5,864 30 Apr 21 ₹11,213 30 Apr 22 ₹15,714 30 Apr 23 ₹17,333 Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹8,072 30 Apr 20 ₹5,330 30 Apr 21 ₹10,325 30 Apr 22 ₹12,120 30 Apr 23 ₹12,259
L&T Emerging Businesses Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 1.7% Equity 98.3% Equity Sector Allocation
Sector Value Industrials 34.81% Basic Materials 17.04% Consumer Cyclical 15.6% Financial Services 9.15% Technology 7.18% Real Estate 5.69% Consumer Defensive 4.82% Health Care 2.66% Energy 1.27% Communication Services 0.08% Top Securities Holdings / Portfolio
Name Holding Value Quantity K.P.R. Mill Ltd (Consumer Cyclical)
Equity, Since 28 Feb 15 | KPRMILL3% ₹269 Cr 5,081,639 RHI Magnesita India Ltd (Industrials)
Equity, Since 31 Aug 18 | RHIM3% ₹235 Cr 3,018,479 Indian Bank (Financial Services)
Equity, Since 31 Jan 22 | 5328143% ₹230 Cr 7,556,600 Grindwell Norton Ltd (Industrials)
Equity, Since 30 Sep 17 | 5060763% ₹225 Cr 1,127,322 Carborundum Universal Ltd (Industrials)
Equity, Since 31 Jul 16 | CARBORUNIV3% ₹219 Cr 2,249,700 KEI Industries Ltd (Industrials)
Equity, Since 31 Jan 20 | KEI2% ₹215 Cr 1,329,400 JK Lakshmi Cement Ltd (Basic Materials)
Equity, Since 31 Oct 20 | JKLAKSHMI2% ₹209 Cr 2,845,600 E I D Parry India Ltd (Consumer Defensive)
Equity, Since 31 Jan 20 | EIDPARRY2% ₹207 Cr 3,804,620 Apar Industries Ltd (Industrials)
Equity, Since 31 Mar 17 | APARINDS2% ₹200 Cr 1,184,900 Ratnamani Metals & Tubes Ltd (Basic Materials)
Equity, Since 30 Nov 17 | RATNAMANI2% ₹195 Cr 880,422 Aditya Birla Sun Life Small Cap Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 4.9% Equity 95.1% Equity Sector Allocation
Sector Value Consumer Cyclical 23.26% Industrials 20.79% Financial Services 15.48% Basic Materials 11.32% Technology 7.5% Consumer Defensive 6.85% Health Care 4.82% Real Estate 2.56% Communication Services 2.16% Top Securities Holdings / Portfolio
Name Holding Value Quantity JK Cement Ltd (Basic Materials)
Equity, Since 31 Mar 18 | JKCEMENT3% ₹104 Cr 346,400 Go Fashion (India) Ltd (Consumer Cyclical)
Equity, Since 30 Nov 21 | 5434012% ₹75 Cr 696,280 Hitachi Energy India Ltd Ordinary Shares (Technology)
Equity, Since 30 Sep 20 | POWERINDIA2% ₹74 Cr 223,165 Campus Activewear Ltd (Consumer Cyclical)
Equity, Since 30 Apr 22 | 5435232% ₹66 Cr 1,839,542 Cholamandalam Financial Holdings Ltd Shs Dematerialised (Financial Services)
Equity, Since 31 Dec 18 | CHOLAHLDNG2% ₹65 Cr 1,072,811 VIP Industries Ltd (Consumer Cyclical)
Equity, Since 31 May 21 | VIPIND2% ₹63 Cr 1,060,836 Axis Bank Ltd (Financial Services)
Equity, Since 31 Jan 22 | 5322152% ₹60 Cr 693,565 Triveni Turbine Ltd (Industrials)
Equity, Since 30 Sep 22 | TRITURBINE2% ₹55 Cr 1,492,744 Endurance Technologies Ltd (Consumer Cyclical)
Equity, Since 30 Apr 20 | ENDURANCE2% ₹53 Cr 395,581
↓ -3,928 Craftsman Automation Ltd (Consumer Cyclical)
Equity, Since 31 Mar 21 | CRAFTSMAN2% ₹53 Cr 170,002
Thus, in a nutshell, it can be said that both the schemes differ on account of various parameters. As a consequence, individuals should be careful while investing in any of the schemes. They should understand the modalities of the scheme completely before investing. They should also check whether the scheme is in-line with their investment objective. This will help them to attain their objectives on time and in a hassle-free manner.
good article