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Fincash » Nippon India Small Cap Vs Franklin India Smaller Companies Fund

Nippon India Small Cap Fund Vs Franklin India Smaller Companies Fund

Updated on January 22, 2020 , 1002 views

Nippon India Small Cap Fund (Formerly known as Reliance Small Cap Fund) and Franklin India Smaller Companies Fund both belong to the small-cap category of Mutual Funds. Small cap funds form the bottom of the pyramid when Equity Funds are classified on the basis of market capitalization. These schemes invest their corpus in shares of companies having a market capitalization of less than INR 500 crores. These companies are generally in the nascent stages and have good potential to grow.

Though small-cap funds have a higher level of risk yet; they earn high returns. Also, these schemes help individuals to diversify their portfolio. Though both Reliance/Nippon India Small Cap Fund and Franklin India Smaller Companies Fund belong to the same category, nevertheless; there still exists a difference between them. So, let us understand the differences between both the schemes based on numerous parameters.

Nippon India Small Cap Fund (Formerly Reliance Small Cap Fund)

Important- From October 2019, Reliance Mutual Fund has been renamed as Nippon India Mutual Fund. Nippon Life has acquired majority (75%) stakes in Reliance Nippon Asset Management (RNAM). The company will continue to run its operations without any change in structure and management.

It is is an open-ended scheme and the objective of the scheme is to achieve capital growth in the long-term by predominantly Investing in shares of small-cap companies. As on March 31, 2018, some of the top 10 holdings of Nippon India/Reliance Small Cap Fund included Navin Fluorine International Limited, Deepak Nitrite Limited, Zydus Wellness Limited, RBL Bank Limited and VIP Industries Limited. The fund managers managing Nippon India Small Cap Fund are Mr. Samir Rachh and Mr. Dhrumil Shah. The fund aims to identify good growth businesses with reasonable size, quality management, and rational valuation. The Mutual Fund scheme uses S&P BSE Small Cap Index as its base to construct its portfolio.

Franklin India Smaller Companies Fund

Franklin India Smaller Companies Fund is offered by Franklin Templeton under the small-cap category. It is an open-ended scheme that was launched in the year 2006. Franklin India Smaller Companies Fund uses Nifty Free Float Midcap 100 Index to build its portfolio. The scheme helps to identify companies that have growth potential and can transform into future market leaders as a consequence of the increase in the market capitalization over time. As on February 28, 2018, some of the top constituents of the scheme’s portfolio included Finolex Cables Limited, Nesco Limited, Voltas Limited, Care Ratings Limited, and Brigade Enterprises Limited. Franklin India Smaller Companies Fund is jointly managed by Mr. Janakiraman Rengaraju, Mr. Hari Shyamsunder, and Mr. Srikesh Karunakaran Nair.

Nippon India Small Cap Fund Vs Franklin India Smaller Companies Fund

There are numerous differences between Reliance/Nippon India Small Cap Fund and Franklin India Smaller Companies Fund though both of them belong to the same category. So, let us understand the differences between both the schemes based on various parameters that are divided into four sections, namely, basics section, performance section, yearly performance section, and other details section.

Basics Section

It is the first section of comparison between both the schemes. Some of the parameters that form part of this section include scheme category, Fincash Ratings, and current NAV. The comparison of scheme category of the funds shows that both of them belong to the same category, that is, Equity Mid & Small-cap. With respect to Fincash Ratings, it can be said that, both Nippon India Small Cap Fund and Franklin India Smaller Companies Fund are rated as 4-Star Fund. The comparison of current NAV reveals that Franklin India Smaller Companies Fund leads the race. As on April 10, 2018, the NAV of Franklin was approximately INR 60 while of Reliance Small Cap Fund was approximately INR 45. The summary comparison of basics section is tabulated as follows.

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
Nippon India Small Cap Fund
Growth
Fund Details
₹41.6542 ↑ 0.11   (0.26 %)
₹8,525 on 31 Dec 19
16 Sep 10
Equity
Small Cap
6
Moderately High
2.49
-0.25
1.11
2.94
Not Available
0-1 Years (1%),1 Years and above(NIL)
Franklin India Smaller Companies Fund
Growth
Fund Details
₹52.6194 ↑ 0.34   (0.64 %)
₹6,929 on 31 Dec 19
13 Jan 06
Equity
Small Cap
11
Moderately High
2.14
-0.43
0.16
0.76
Not Available
0-1 Years (1%),1 Years and above(NIL)

Performance Section

The performance section compares the Compounded Annual Growth Rate or CAGR returns between both the schemes. This CAGR returns is compared at different time intervals that are 1 Month Return, 6 Month Return, 3 Year Returns, and Return since Inception. The comparison of performance section reveals that in most situations, Reliance Small Cap Fund leads the race. The returns earned by Reliance Small Cap Fund is higher as compared to Franklin India Smaller Companies Fund. The table given below compares the performance of both the schemes.

Parameters
Performance1 Month
3 Month
6 Month
1 Year
3 Year
5 Year
Since launch
Nippon India Small Cap Fund
Growth
Fund Details
9.5%
11.2%
14.5%
8.1%
10%
10.4%
16.5%
Franklin India Smaller Companies Fund
Growth
Fund Details
7.2%
8.3%
7.1%
1.7%
4.1%
6.7%
12.6%

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Yearly Performance Section

It is the third section in the comparison between both the schemes. Yearly Performance Section compares the absolute returns for both the schemes for a given year. The comparison of yearly performance section shows that for certain years returns generated by Reliance Small Cap Fund is higher as compared to Franklin India Smaller Companies Fund. On the contrary, for certain years, Franklin India Smaller Companies Fund has outperformed. The table given below shows the summary comparison of both the schemes.

Parameters
Yearly Performance2018
2017
2016
2015
2014
Nippon India Small Cap Fund
Growth
Fund Details
-2.5%
-16.7%
63%
5.6%
15.1%
Franklin India Smaller Companies Fund
Growth
Fund Details
-5%
-17.4%
43.5%
10.2%
9.6%

Other Details Section

It is the last section in comparison of both the schemes. The comparable parameters that form part of other details section include AUM, Minimum SIP investment, Minimum Lumpsum Investment, and others. The minimum SIP investment in case of both the schemes is different. The SIP investment in case of Reliance Small Cap Fund is INR 100 and for Franklin India Smaller Companies Fund is INR 500. Nevertheless, the lump sum investment amount for both the schemes is same, that is, INR 5,000. With respect to the AUM of both the schemes, Franklin leads the race. As on February 28, 2018, the AUM of Franklin India Smaller Companies Fund was approximately INR 7,128 crores. On the other hand, the AUM of Reliance Small Cap Fund was approximately INR 6,613 crores. The summary comparison of other details sections is tabulated as follows.

Parameters
Other DetailsMin SIP Investment
Min Investment
Fund Manager
Nippon India Small Cap Fund
Growth
Fund Details
₹100
₹5,000
Samir Rachh - 3 Yr.
Franklin India Smaller Companies Fund
Growth
Fund Details
₹500
₹5,000
R. Janakiraman - 12.67 Yr.

Growth of 10k Investments over the years

Growth of 10,000 investment over the years.
Nippon India Small Cap Fund
Growth
Fund Details
DateValue
31 Dec 14₹10,000
31 Dec 15₹11,511
31 Dec 16₹12,151
31 Dec 17₹19,802
31 Dec 18₹16,497
31 Dec 19₹16,082
Growth of 10,000 investment over the years.
Franklin India Smaller Companies Fund
Growth
Fund Details
DateValue
31 Dec 14₹10,000
31 Dec 15₹10,956
31 Dec 16₹12,073
31 Dec 17₹17,320
31 Dec 18₹14,303
31 Dec 19₹13,585

Detailed Assets & Holdings Comparison

Asset Allocation
Nippon India Small Cap Fund
Growth
Fund Details
Asset ClassValue
Cash4.53%
Equity95.24%
Other0.23%
Equity Sector Allocation
SectorValue
Industrials22.43%
Basic Materials19.86%
Consumer Cyclical13.79%
Financial Services13.48%
Consumer Defensive11.11%
Technology4.47%
Health Care3.18%
Communication Services2.5%
Utility1.8%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
CreditAccess Grameen Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Jul 19 | 541770
3%₹272 Cr3,395,276
↑ 64,501
Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Dec 16 | 506401
3%₹252 Cr7,475,750
↓ -347,422
Triparty Repo
CBLO/Reverse Repo | -
3%₹230 Cr
Orient Electric Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 31 May 18 | 541301
2%₹203 Cr9,574,898
Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Apr 18 | 540762
2%₹201 Cr4,276,100
HDFC Bank Ltd (Financial Services)
Equity, Since 30 Jun 14 | HDFCBANK
2%₹185 Cr1,448,646
Affle India Ltd (Communication Services)
Equity, Since 31 Jul 19 | 542752
2%₹184 Cr1,210,018
↓ -122,066
Zydus Wellness Ltd (Consumer Defensive)
Equity, Since 31 Aug 16 | 531335
2%₹169 Cr1,167,400
↑ 200,000
Birla Corp Ltd (Basic Materials)
Equity, Since 31 May 18 | 500335
2%₹161 Cr2,457,475
Tata Global Beverages Ltd (Consumer Defensive)
Equity, Since 31 May 19 | 500800
2%₹158 Cr4,896,099
Asset Allocation
Franklin India Smaller Companies Fund
Growth
Fund Details
Asset ClassValue
Equity92.33%
Other7.67%
Equity Sector Allocation
SectorValue
Industrials26.13%
Financial Services18.39%
Basic Materials12.44%
Consumer Cyclical9.74%
Health Care6.12%
Communication Services4.97%
Real Estate4.52%
Consumer Defensive3.74%
Energy3.31%
Technology2.98%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Call, Cash & Other Assets
Receivables | -
8%₹533 Cr
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 14 | HDFCBANK
5%₹353 Cr2,767,306
Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | 532929
3%₹197 Cr9,601,987
Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Jan 16 | 506401
3%₹192 Cr5,685,489
Hindustan Petroleum Corp Ltd (Energy)
Equity, Since 28 Feb 18 | HINDPETRO
3%₹178 Cr6,289,744
Voltas Ltd (Industrials)
Equity, Since 31 Oct 13 | VOLTAS
3%₹177 Cr2,521,141
Jyothy Labs Ltd (Consumer Defensive)
Equity, Since 31 Dec 15 | 532926
3%₹177 Cr9,863,765
Nesco Ltd (Industrials)
Equity, Since 31 Dec 13 | 505355
2%₹171 Cr2,824,663
J.B. Chemicals & Pharmaceuticals Ltd (Healthcare)
Equity, Since 30 Jun 14 | 506943
2%₹157 Cr3,967,822
Atul Ltd (Basic Materials)
Equity, Since 31 May 14 | ATUL
2%₹156 Cr385,642

Thus, from the above pointers, it can be said that both the schemes differ on various parameters. However, individuals should be careful while choosing the scheme. They should check whether the scheme is in-line with their investment objective. Additionally, they should understand the functioning of the scheme completely. Moreover, if required, individuals can even consult a financial advisor. This will help them to attain their objectives 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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