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Small-cap equity mutual fund gives 40% CAGR in last 3 years. Do you have?

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Mutual funds: Despite global economy reeling under the heat of economic slowdown and inflation pressure, some equity mutual funds have delivered stellar return to its investors. Canara Robeco Small Cap Fund one of them. This small-cap equity fund has given whopping 40 per cent CAGR (Compound Annual Growth Rate) in last three years beating its category CAGR in this period by over 10 per cent. Apart from this, this equity mutual fund is one of those small-cap funds that has smallest expense ratio.

Mutual fund return

This small-cap equity mutual fund, which has received 5-star rating from Value Research has given 16.90 per cent annualised return to its investors in last one year, turning 1 lakh upfront investment into 1.20 lakh today. If an investor had started 10,000 monthly SIP in this small-cap equity mutual fund one year ago, its absolute value would have been 1.31 lakh today.

Likewise, if an investor had invested 1 lakh upfront in this equity mutual fund two years ago, it would have turned to 2.40 lakh today whereas a 10,000 per month SIP started two years ago would have turned to 3.33 lakh today. This small-cap fund has given whopping 49.25 per cent annualised return in its investors in last two years.

Similarly, if the investor had invested 1 lakh upfront in this equity mutual fund scheme three years ago, its 1 lakh would have turned to 2.94 lakh today whereas 10,000 monthly SIP started three years ago in the scheme would have grown to 6.56 lakh today.

Should you invest?

Speaking on Canara Robeco Small Cap Fund, Nidhi Manchanda, a certified financial planner said, “Aggressive investors can invest into this fund with an investment horizon of 5 years or more. If you are moderate to conservative investor, then you should avoid investing into this fund as it has around 94% exposure to Mid and small cap stocks. Investing by way of SIP is recommended to diversify investments over time. It is further suggested to not stop the SIP in volatile markets. Although a very high-risk fund category, but the fund manager has managed to control the downside risk and controlled losses during market corrections.”

Disclaimer: The views and recommendations made above are those of individual experts or personal finance companies, and not of Mint.

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Read More: Small-cap equity mutual fund gives 40% CAGR in last 3 years. Do you have?

2022-09-24 06:10:43

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