Bangalore: Out of top ten small-cap funds across Asia, seven have been snapped up by Indian funds. According to an analysis of nearly 300 Asian small-cap schemes, DSP BlackRock Micro Cap Fund is leading the chart, with an 82 percent return over the past year, reports Shailendra Bhatnagar of ET Now.
The fund, managed by Vinit Sambre, has also beaten the 58 percent rise of the Small-Cap Index in BSE since 2009. During this period, Sensex has gained 20 percent, while the wider BSE 500 Index is up 27 percent.
The other six funds that have given investors returns between 44 percent and 57 percent on a trailing 12-month basis include Sundaram BNP Paribas Select Small Cap, HSBC Small Cap, JPMorgan Smaller Companies, Franklin India Prima, Franklin India Smaller Companies and ING Vysya CUB.
According to Value Research, a mutual fund tracking firm, the DSP fund as an impressive product in the entire 'small-cap universe'. The firm said that the fund holds credible and known stocks, with a high return on equity.
The close-ended nature of some of these funds enable them defy the market turbulence. As they did not face redemption pressures through the declining phase, they can invest for the longer term, said Dhirendra Kumar, CEO of Value Research.
In June this year, the DSP fund became open-ended. There are 10 small-cap funds in India, which manage roughly Rs. 3,450 crore in stocks.
According to Market experts, the rally shifted to small caps because many large-cap stocks became fully priced and relatively unattractive over the past year. Stocks like cooler maker Symphony and luggage maker VIP Industries have led the small-cap charge in the market.
Experts recommend investors to be cautious and have just 10-15 percent of their equity exposure in small-cap funds, even though they have delivered solid returns in the past one year.