Nippon India Small Cap Fund Vs Nippon India Focused Equity Fund

Nippon India Small Cap Fund (Formerly known as Reliance Small Cap Fund) and Nippon India Focused Equity Fund (Formerly known as Reliance Focused Equity Fund) both belong to the Mid & Small Cap category of Equity Funds. mid cap funds invest their corpus in shares of mid sized companies while Small cap funds invest their corpus in shares of start-ups or small sized companies. These schemes are considered to be a good option for long-term investment. Mid-cap companies have a Market capitalization between INR 500 – INR 10,000 Crores while for small-cap companies it's less than INR 500 Crores. Though both Reliance/Nippon India Small Cap Fund and Reliance/Nippon India Focused Equity Fund belong to the same category of Mid & Small-cap Fund yet, there exists a difference between both the schemes. So, let us understand the differences between both the schemes.

Important Information

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.

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

Nippon India Mutual Fund manages and offers Reliance/Nippon India Small Cap Fund. This open-ended small-cap fund was incepted on September 16, 2010. The investment objective of this scheme is divided into two parts. The primary objective is to attain long-term Capital growth by Investing primarily in shares of small-cap companies. While the secondary objective is to generate consistent returns by investing in debt and money market securities. Nippon India/Reliance Small Cap Fund is jointly managed by Mr. Samir Rachh and Mr. Dhrumil Shah. As on March 31, 2018, some of the top holdings of Reliance Small Cap Fund included Navin Fluorine International Limited, Deepak Nitrite Limited, RBL Bank Limited, VIP Industries Limited, and Zydus Wellness Limited.

Nippon India Focused Equity Fund (Formerly Reliance Focused Equity Fund)

Nippon India Mutual Fund also offers another scheme titled Nippon India Focused Equity Fund under Mid & Small Cap Category. This open-ended scheme was launched in the year 2006. The fund manager managing Nippon India Focused Equity Fund is Mr. Samir Rachh. The objective of the scheme is to attain long-term capital growth and long-term capital opportunities. The scheme tries to attain the objective by investing in shares of mid and small cap companies. As on March 31, 2018, some of the top holdings of Nippon India Focused Equity Fund’s Portfolio consisted of HDFC Bank Limited, GE Power India Limited, The India Cements Limited, NCC Limited, and Muthoot Finance Limited. As per the scheme’s objectives, it invests around 50-70% in shares of mid-cap companies and the remaining in shares of small-cap companies. Nippon India Focused Equity Fund uses S&P BSE MidSmallCap Index to build its portfolio.

Nippon India Small Cap Fund Vs Nippon India Focused Equity Fund

The various comparable elements in case of Reliance/Nippon India Small Cap Fund Vs Nippon India Focused Equity Fund are classified into four sections. They are basics section, performance section, yearly performance section and other details section. So, let us understand the differences between both the schemes based on these sections.

Basics Section

The comparable elements that form part of basics section include current NAV, scheme category, and Fincash Rating. To being with the scheme category, it can be said that both the schemes belong to the same category, that is, Mid & Small-Cap. The comparison of current NAV reveals that both the schemes have almost similar NAV. As on April 20, 2018, the NAV of Reliance/Nippon India Small Cap Fund was approximately INR 46 while of Nippon India Focused Equity Fund was approximately INR 47. The next comparable Factor is, Fincash Rating, which reveals that Reliance/Nippon India Small Cap Fund is rated as 4-Star and Nippon India Focused Equity Fund is rated as 2-Star. The summary of the comparable elements forming part of basics section is tabulated as follows.

Performance Section

It is the second section in the comparison of both the schemes. It compares the Compounded Annual Growth Rate or CAGR returns of both the schemes. These returns are compared at various time intervals such as 1 Month Return, 6 Month Return, 3 Year Return and Returns Since Inception. The holistic comparison of the performance section reveals that in almost all the instances, Reliance Small Cap Fund has performed better as compared to Nippon India focused fund. The table given below compares the performance section between both the schemes.

Yearly Performance Section

Yearly Performance Section is the third section in the comparison of both the schemes that compares the absolute returns generated by both the schemes for a particular year. The comparison of yearly performance section also reveals that for almost all the years, the performance of Reliance/Nippon India Small Cap Fund is better than the performance of Nippon India Focused Equity Fund. The summary comparison of the yearly performance section is tabulated as follows.

Other Details Section

Other Details Section is the last section in the comparison of both the schemes. The parameters that form part of the other details section include the AUM, minimum SIP and lump sum investment, and others. To begin with the AUM, it can be said that there is a drastic difference between the AUM of both the schemes. As on March 31, 2018, the AUM of Nippon India Small Cap Fund is INR 6,545 Crores and of Nippon India Focused Equity Fund is INR 3,136 Crores. The minimum SIP and lumpsum investment for Reliance Small Cap Fund and Reliance Mid & Small Cap Fund both are same. The minimum SIP amount for both the schemes is INR 100 while the minimum lumpsum amount is INR 5,000. The summary comparison of other details section is tabulated as follows.

Growth of 10k Investments over the years