Nippon India Small Cap Fund Vs SBI Small Cap Fund

Nippon India Mutual Fund (Formerly known as Reliance Small Cap Fund) and SBI Small Cap 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. Small cap stocks are defined as stocks whose market capitalization is below top 250 companies in terms of full market capitalization.

Small cap 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 Nippon India/Reliance Small Cap Fund and SBI Small Cap 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

Nippon India Mutual Fund (Reliance Small Cap Fund) was launched in the year 2010 with an aim to generate long-term capital appreciation by Investing predominantly in equity and related instruments of small cap companies. The fund also invests a portion of the portfolio in debt and money market securities in order to generate consistent returns. Nippon India Small Cap Fund is currently managed by Samir Rachh and Dhrumil Shah. Some of the top holdings of the scheme as on 30th June 2018 are Zydus Wellness Ltd, VIP Industries Ltd, Cyient Ltd, etc.

SBI Small Cap Fund (Erstwhile SBI Small & Midcap Fund)

SBI Small Cap Fund (earlier known as SBI Small & Midcap Fund) was launched in the year 2013. The fund seeks to provide investors with a long-term capital growth along with the liquidity of an open-ended scheme by investing in a well-diversified basket of equity stocks of small cap companies. As an investment strategy, the SBI Small Cap Fund follows a blend of growth and value style of investing. The current fund manager of the scheme is R Srinivasan. Some of the top holdings of the scheme as on 31/05/2018 are CCIL-Clearing Corporation of India Ltd (CBLO), Westlife Development LTD, Kirloskar Oil Engines Ltd, Hawkins Cookers Ltd, etc.

Nippon India/Reliance Small Cap Fund Vs SBI Small Cap Fund

Though these schemes belong to the same category, yet these schemes differ on various parameters. So, let us understand the parameters which are divided into four sections, namely, Basics Section, Performance Report, Yearly Performance Report, and Other Details Section.

Basics Section

This section compares the various elements such as Current NAV, Scheme Category, and Fincash Rating. To begin with the scheme category, it can be said that both the schemes Nippon India Small Cap Fund and SBI Small Cap Fund belong to the same category Equity Mutual Fund. With respect to the next parameter, that is, Fincash Rating, it can be said that Nippon India Small Cap Fund is rated as 4-Star and SBI Small Cap Fund is rated as 5-Star. In case of Net Asset Value, Nippon India Small Cap Fund's NAV as on 16th July 2018 is INR 40.1166, whereas the NAV of SBI Small Cap Fund is INR 50.6851. The table given below summarizes the details of basics section.

Performance Section

The performance section compares the Compounded Annual Growth Rate or CAGR returns between both the schemes at different time periods. With respect to performance, it can be said there is not much difference in the performance of both the schemes. However, in many instances, SBI Small Cap Fund leads the race. The performance of both the schemes at different time periods is shown below as follows.

Yearly Performance Section

This section deals with the absolute returns generated by both the funds in each year. In this case, we can see that there is a difference in the performance of both the schemes. In certain situations, Nippon India Small Cap Fund has performed better than SBI Small Cap Fund. While in some situations, the other scheme has performed better. The yearly performance of both the funds is tabulated as follows.

Other Details Section

This is the last section in the comparison of both the funds. In this section, the parameters such as AUM, Minimum SIP and Lumpsum Investment, and Exit Load are compared. To begin with the minimum SIP investment, both the schemes have different monthly SIP amounts. In case of Nippon India Small Cap Fund it is INR 100 while in case of SBI Small Cap Fund it is INR 500. But, in case of Minimum Lumpsum Investment, the amount is same for both the funds, i.e., INR 5,000. The AUM of both the schemes are also different. As on 31st May, 2018, the AUM of Nippon India Small Cap Fund was INR 6,944 crores, while of SBI Small Cap Fund it was INR 809 crores. The table given below summarizes the other details for both the schemes.

Growth of 10k Investments over the years