Fincash » Nippon India Small Cap Vs Franklin India Smaller Companies Fund
Table of Contents
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.
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 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.
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.
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 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 Nippon India Small Cap Fund
Growth
Fund Details ₹74.6418 ↓ -0.69 (-0.91 %) ₹18,675 on 31 May 22 16 Sep 10 ☆☆☆☆ Equity Small Cap 6 Moderately High 1.98 0.91 1.34 9.67 Not Available 0-1 Years (1%),1 Years and above(NIL) Franklin India Smaller Companies Fund
Growth
Fund Details ₹76.9007 ↓ -0.65 (-0.84 %) ₹6,455 on 31 May 22 13 Jan 06 ☆☆☆☆ Equity Small Cap 11 Moderately High 1.96 0.54 -0.54 3.15 Not Available 0-1 Years (1%),1 Years and above(NIL)
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 Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch Nippon India Small Cap Fund
Growth
Fund Details -5.9% -11.4% -10.8% 6% 24.1% 14.5% 18.6% Franklin India Smaller Companies Fund
Growth
Fund Details -6.7% -12.1% -13.6% 0.7% 13.4% 7.1% 13.2%
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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 Performance 2021 2020 2019 2018 2017 Nippon India Small Cap Fund
Growth
Fund Details 74.3% 29.2% -2.5% -16.7% 63% Franklin India Smaller Companies Fund
Growth
Fund Details 56.4% 18.7% -5% -17.4% 43.5%
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 Details Min SIP Investment Min Investment Fund Manager Nippon India Small Cap Fund
Growth
Fund Details ₹100 ₹5,000 Samir Rachh - 5.41 Yr. Franklin India Smaller Companies Fund
Growth
Fund Details ₹500 ₹5,000 R. Janakiraman - 15.18 Yr.
Nippon India Small Cap Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 May 17 ₹10,000 31 May 18 ₹12,023 31 May 19 ₹11,240 31 May 20 ₹8,379 31 May 21 ₹18,461 31 May 22 ₹22,068 Franklin India Smaller Companies Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 May 17 ₹10,000 31 May 18 ₹11,152 31 May 19 ₹10,234 31 May 20 ₹6,627 31 May 21 ₹13,870 31 May 22 ₹15,483
Nippon India Small Cap Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 2.66% Equity 97.34% Equity Sector Allocation
Sector Value Industrials 20.63% Basic Materials 17.23% Consumer Cyclical 15.73% Financial Services 12.81% Consumer Defensive 11.44% Technology 9.77% Health Care 4.85% Communication Services 3.13% Real Estate 0.57% Utility 0.07% Top Securities Holdings / Portfolio
Name Holding Value Quantity Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Apr 18 | TIINDIA3% ₹615 Cr 3,296,395 NIIT Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | NIITLTD3% ₹582 Cr 10,139,961 CreditAccess Grameen Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Jul 19 | CREDITACC2% ₹450 Cr 4,343,685
↑ 51,366 KPIT Technologies Ltd (Technology)
Equity, Since 30 Jun 19 | KPITTECH2% ₹443 Cr 8,004,004 Poonawalla Fincorp Ltd (Financial Services)
Equity, Since 28 Feb 18 | POONAWALLA2% ₹432 Cr 14,087,931 Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Dec 16 | DEEPAKNTR2% ₹418 Cr 1,797,743
↓ -284,449 Navin Fluorine International Ltd (Basic Materials)
Equity, Since 30 Sep 11 | NAVINFLUOR2% ₹388 Cr 986,721 Balrampur Chini Mills Ltd (Consumer Defensive)
Equity, Since 28 Feb 19 | BALRAMCHIN2% ₹385 Cr 8,691,212
↓ -808,788 Bajaj Electricals Ltd (Consumer Cyclical)
Equity, Since 31 Mar 16 | BAJAJELEC2% ₹336 Cr 3,062,071 Orient Electric Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 31 May 18 | ORIENTELEC2% ₹320 Cr 9,706,033 Franklin India Smaller Companies Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 3.56% Equity 96.44% Equity Sector Allocation
Sector Value Industrials 26.15% Financial Services 15.46% Consumer Cyclical 15.29% Basic Materials 11.78% Health Care 6.32% Real Estate 6.25% Consumer Defensive 5.92% Technology 3.88% Communication Services 3.48% Energy 1.71% Top Securities Holdings / Portfolio
Name Holding Value Quantity Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Jan 16 | DEEPAKNTR5% ₹323 Cr 1,387,967
↓ -100,000 Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | BRIGADE5% ₹317 Cr 6,950,570
↓ -201,154 KPIT Technologies Ltd (Technology)
Equity, Since 31 Aug 20 | KPITTECH3% ₹226 Cr 4,077,593 GHCL Ltd (Basic Materials)
Equity, Since 30 Sep 16 | GHCL3% ₹206 Cr 3,333,472 CCL Products (India) Ltd (Consumer Defensive)
Equity, Since 30 Apr 19 | CCL3% ₹206 Cr 5,051,976 J.B. Chemicals & Pharmaceuticals Ltd (Healthcare)
Equity, Since 30 Jun 14 | JBCHEPHARM3% ₹200 Cr 1,161,988 K.P.R. Mill Ltd (Consumer Cyclical)
Equity, Since 31 Jan 19 | KPRMILL3% ₹199 Cr 3,160,269
↓ -120,091 Equitas Holding Ltd (Financial Services)
Equity, Since 30 Apr 16 | EQUITAS3% ₹192 Cr 17,172,603 Tube Investments of India Ltd Ordinary Shares (Consumer Cyclical)
Equity, Since 30 Sep 19 | TIINDIA3% ₹187 Cr 1,000,416 Blue Star Ltd (Industrials)
Equity, Since 31 Jan 15 | BLUESTARCO3% ₹186 Cr 1,633,713
↓ -50,000
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.
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