Mumbai: Small and mid-cap funds have beaten the benchmarks as well as large funds in terms of returns, according to an industry report. Leading the small-cap fund is the one-year Reliance Small Cap Fund with returns of 107 per cent, beating the BSE Small Cap Index's returns of 80 per cent by a wide margin, show the data from Value Research that tracks mutual funds as of July 25.
"It is careful stock picking that has made Reliance Small Cap a winner. We have been quite aggressive in our investment decisions and still believe that valuations of many mid- and small-cap companies are very attractive," stated Reliance Mutual Fund chief investment officer for equities Sunil Singhania. Some of the constituents of Reliance small cap are stellar performers like TVS Motors, which has given a one-year return of 351 per cent.
Other constituents like Ceat with 372 per cent return and Atul Industries with 264 per cent return etc have helped the Reliance fund. This five-star fund has chemicals, financials, construction, engineering and automobile are sector holdings for the scheme as of July 25 data from Value Research. "We are looking at increasing allocation towardssectors that are related to domestic economy like capital goods, financial and power where we feel there is lot of opportunity," Singhania said on his investment strategy.
For a one-year period, the benchmarks Sensex and Nift under performed the small cap and mid-cap indices, with returns of 31.90 per cent each. During the same period, the mid-cap indices of the BSE and NSE gave returns of 57.2 per cent and 49.90 per cent respectively.
The large-cap fund top performers returned 50 per cent with the top performer HDFC Top 200 giving 49 per cent, as per the Value Research data. The second best performer is Birla Sun Life Pure Value fund with a 97 per cent one-year return.
"The way our equity portfolio manager is focusing on stock picking and also ensuring owning sufficient exposure to the portfolio reflecting confidence and conviction on those ideas," Birla Sun Life AMC chief executive A Balasubramanian said. The third best is DSP BlackRock Micro Cap Fund-Regular Plan, which has returned 87.72 per cent in the past one year.
The other top performers ate UTI Mid Cap fund with 83 per cent return and ICICI Prudential Value Discovery Fund-Regular plan with 81 per cent return in the past one-year as per Value Research data.
