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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 February 1, 2023 , 3539 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
₹91.0205 ↑ 0.03   (0.03 %)
₹23,701 on 31 Dec 22
16 Sep 10
Equity
Small Cap
6
Moderately High
1.86
0.17
1.43
7.6
Not Available
0-1 Years (1%),1 Years and above(NIL)
Franklin India Smaller Companies Fund
Growth
Fund Details
₹94.7093 ↑ 0.35   (0.37 %)
₹7,288 on 31 Dec 22
13 Jan 06
Equity
Small Cap
11
Moderately High
1.9
-0.01
-0.28
4.29
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
-2.9%
-1.9%
5.6%
3.6%
31.1%
15.1%
19.5%
Franklin India Smaller Companies Fund
Growth
Fund Details
-1.9%
-0.9%
7.8%
1.6%
22.9%
9.4%
14.1%

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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 Performance2022
2021
2020
2019
2018
Nippon India Small Cap Fund
Growth
Fund Details
6.5%
74.3%
29.2%
-2.5%
-16.7%
Franklin India Smaller Companies Fund
Growth
Fund Details
3.6%
56.4%
18.7%
-5%
-17.4%

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 - 6 Yr.
Franklin India Smaller Companies Fund
Growth
Fund Details
₹500
₹5,000
R. Janakiraman - 15.76 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 Jan 18₹10,000
31 Jan 19₹8,121
31 Jan 20₹8,857
31 Jan 21₹10,750
31 Jan 22₹18,551
31 Jan 23₹19,678
Growth of 10,000 investment over the years.
Franklin India Smaller Companies Fund
Growth
Fund Details
DateValue
31 Jan 18₹10,000
31 Jan 19₹8,258
31 Jan 20₹8,405
31 Jan 21₹9,646
31 Jan 22₹14,690
31 Jan 23₹15,223

Detailed Assets & Holdings Comparison

Asset Allocation
Nippon India Small Cap Fund
Growth
Fund Details
Asset ClassValue
Cash3.54%
Equity96.46%
Equity Sector Allocation
SectorValue
Industrials24.72%
Consumer Cyclical16.35%
Financial Services15.74%
Basic Materials15.66%
Consumer Defensive7.99%
Technology6.8%
Health Care5.02%
Communication Services1.37%
Energy0.59%
Real Estate0.49%
Utility0.37%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Apr 18 | TIINDIA
4%₹907 Cr3,267,559
Bank of Baroda (Financial Services)
Equity, Since 31 Mar 21 | BANKBARODA
2%₹465 Cr25,045,248
HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK
2%₹440 Cr2,700,000
KPIT Technologies Ltd (Technology)
Equity, Since 30 Jun 19 | KPITTECH
2%₹383 Cr5,444,917
↓ -110,000
Bajaj Electricals Ltd (Consumer Cyclical)
Equity, Since 31 Mar 16 | BAJAJELEC
2%₹372 Cr3,062,071
Balrampur Chini Mills Ltd (Consumer Defensive)
Equity, Since 28 Feb 19 | BALRAMCHIN
2%₹369 Cr9,291,212
Fine Organic Industries Ltd Ordinary Shares (Basic Materials)
Equity, Since 30 Jun 18 | FINEORG
1%₹348 Cr605,377
State Bank of India (Financial Services)
Equity, Since 31 Oct 19 | SBIN
1%₹335 Cr5,466,500
Tejas Networks Ltd (Technology)
Equity, Since 30 Jun 17 | TEJASNET
1%₹333 Cr5,763,697
Timken India Ltd (Industrials)
Equity, Since 28 Feb 18 | TIMKEN
1%₹331 Cr1,067,270
Asset Allocation
Franklin India Smaller Companies Fund
Growth
Fund Details
Asset ClassValue
Cash3.82%
Equity96.18%
Equity Sector Allocation
SectorValue
Industrials24.66%
Financial Services19.26%
Consumer Cyclical16.13%
Basic Materials9.96%
Consumer Defensive6.39%
Health Care6.09%
Real Estate5.82%
Technology3.47%
Communication Services2.54%
Energy1.38%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | BRIGADE
4%₹316 Cr6,800,570
Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Jan 16 | DEEPAKNTR
4%₹276 Cr1,387,967
Karur Vysya Bank Ltd (Financial Services)
Equity, Since 31 Oct 12 | KARURVYSYA
3%₹220 Cr19,398,917
J.B. Chemicals & Pharmaceuticals Ltd (Healthcare)
Equity, Since 30 Jun 14 | JBCHEPHARM
3%₹216 Cr1,111,988
↓ -50,000
Equitas Holding Ltd (Financial Services)
Equity, Since 30 Apr 16 | EQUITAS
3%₹215 Cr17,172,603
ICICI Bank Ltd (Financial Services)
Equity, Since 28 Feb 21 | ICICIBANK
3%₹201 Cr2,259,945
Jyothy Labs Ltd (Consumer Defensive)
Equity, Since 31 Dec 15 | JYOTHYLAB
3%₹201 Cr9,811,573
↓ -2,192
CCL Products (India) Ltd (Consumer Defensive)
Equity, Since 30 Apr 19 | CCL
3%₹194 Cr3,670,319
↓ -70,000
Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Sep 19 | TIINDIA
3%₹185 Cr665,416
Blue Star Ltd (Industrials)
Equity, Since 31 Jan 15 | BLUESTARCO
2%₹177 Cr1,473,713

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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