Skip to main content

Microcap Funds

 Micro-cap Funds - Invest Online
 

In 2015, of about 300 diversified equity funds (except tax-saving, thematic and sectoral), nine of the top 10 funds by returns were focused on mid- and small-sized companies. And six of these focused on—in terms of the size of the underlying holdings—tiny companies. These mutual fund (MF) schemes are commonly known as micro-cap funds.

NEED TO DIFFERENTIATE

As the equity market expands and more index funds and exchange-traded funds are launched, it's getting tougher for fund houses to set their large-cap funds apart from their competitors'. Beating the benchmark and peers will also get more difficult as more of these funds make their debut. That's one reason why some fund houses have been launching schemes that tap the smaller range of companies; they try to be among the first to spot such companies before others pick them up as well and stock prices start to rise. One such emerging category is micro-cap funds.

WHAT IS ITS SIZE?

Different fund houses have different definitions of what constitutes a micro-cap index. Some invest in companies that are a part of the S&P BSE SmallCap index. There are other methods, too. For instance, DSP BlackRock Investment Managers Pvt. Ltd sorts the companies as per their market capitalisation.

 

The top 100 companies are classified as large-cap, next 100 as mid-cap, and the next 100 as small-cap. And anything below that (301st stock and below) is classified as a micro-cap company.

CLOSED-END NATURE

In the pecking order, micro-cap companies are said to be smaller than even the so-called small-sized companies. Due to the small size of these companies, fund managers prefer micro-cap funds to be closed-end. In 2014 and 2015, many such funds, especially from two fund houses, were launched and all of them were closed-end, and thus in a series. Since closed-end funds freeze inflows and outflows, fund managers can take long-term calls. There are only a few open-ended micro-cap funds.

HIGH-RISK, HIGH-RETURN

As micro-cap companies take time to grow (provided, of course, they are well-managed), it's best to have a very long-term horizon. Some financial planners and MF distributors do not recommend micro-cap funds to anyone whose time horizon is less than seven years.

One big risk in these companies is liquidity. Most small-sized companies are illiquid, and fund managers avoid taking concentrated exposures as it could get challenging to sell these stocks if there is panic redemption. But for those who are patient, these can be rewarding. As against an average of 1.74% return given by diversified equity funds this year, micro-caps returned 10-16%. So, before you decide to invest in a micro-cap fund, remember the risk–reward equation.

-------------------------------------------------------
Invest Rs 150000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

There are a lot of mutual funds that customers can choose from but some of the best Tax Saver mutual funds in India right now are:

Top 10 Tax Saver Mutual Funds to invest in India for 2016 or Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan
This list constantly under goes changes based on improvement or reduction in performance of the mutual fund. That could change the position of these funds among the top 10 Tax Saving Mutual Funds in India.

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

--------------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

Popular posts from this blog

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Save Tax With Mutual Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

Reliance Health Total

  Reliance Life Insurance has launched Reliance Health Total, a non-linked, non-participating and non-variable health insurance plan . It provides a fixed benefit cover for hospitalisation, critical illnesses and surgeries. The customer can also make a claim for over-the-counter health-related expenses. This is a regular-pay, five-year plan that can be renewed till the age of 99. The plan comes with two options: customers can choose a higher medical reimbursement benefit or a higher sum insured. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - I...

Compared to Bank FDs, Debt Mutual Funds are more Tax-Efficient

It is a security vis-a-vis returns battle between bank fixed deposits and debt funds In the past few months, banks have been consistently increasing their rates of interest on different fixed deposits. And after the Reserve Bank of India's Annual Monetary Policy, even the saving deposit rates are up at 4 per cent. For a six-month fixed deposit, you can easily get a rate of anywhere between 6 and 7 per cent annually. However, experts feel if one is looking to invest for less than a year, debt funds could make a better choice. The reason: Liquid funds and ultra short-term funds are giving annualised returns of 8 per cent. Financial advisors suggest retail investors opt for mutual fund schemes as they are more flexible and give higher post-tax returns. Opt for fixed deposits only if you are comfortable being locked-in for the tenure as a premature exit can attract a penalty. If your main aim is to ensure liquidity, debt funds are preferable. Though a fixed deposit gives you a...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now