HDFC Small Cap Fund (G) Review – Is it a good mutual fund to invest?

I invested in HDFC Small Cap Fund (G) last year and this review is based on my experience and study over a period of 15 months.

I never had high risk appetite and have always opted for debt funds or fixed deposits. Last year, I was forced to change my opinion when stock market gave good results. Most of my colleagues made good returns on their investments while I made around 9%.

Picking a stock directly is like relying on an organization or sector to grow. This makes you completely dependent on a performance of organization so I thought of looking at funds managed by experienced fund managers. 

When I started my research, I realized and learned few things. Not all fund managers are good and a fund's growth is highly dependent on a fund manager. Also, I didn’t look at large caps since small-cap funds and large-cap funds will outperform large cap in long run. 

In small cap funds, a large portion of investment is done in companies with small market capitalization. These funds are risky and volatile. This means that they give high returns on investments.

One portion of my investment was in HDFC Small Cap Fund (G). Benchmark fund for this would be NIFTY Smallcap 100.

Most fund managers suggest the investment to be a long-term since small cap funds are volatile and give high returns in long run.

HDFC Small Cap Fund (G) is consider to be equity fund since more 85% of asset allocation is in equity. One fourth of the allocation of funds is done in technology and engineering sector thus making it more volatile (these sectors are heavily dependent on global economy)

If you look at historic graph for last 2 years below, the movement has been volatile and HDFC Small Cap Fund has given great results. It touched its peak on Jan-16 last years when the NAV was 48.012. On observing the graph carefully, you can see that despite the fall in market the NAV has been above 39 and this definitely is a sign of good fund.

HDFC Small Cap Fund review-

The aim of the equity strategy in HDFC Small Cap Fund (G) is to invest in companies with growth prospects and great financial health.
There are other small cap funds out there but Crisil ranking of this fund is higher than all.

Finally, I would rate this fund a 5-star fund which has great long-term potential. Invest in HDFC Small Cap Fund (G) when you see a fall in market. Once the market trade in green, you can earn huge returns.

Expectations – expect a 20% return over a period of 1 years if you enter right time.

Read disclaimer before investing

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  1. Great and very informative post. Great review on HDFC small cap fund, might consider investing soon

  2. Wow love how you break down HDFC funds. I just recently been focusing on the markets and learning aboutabout term and long term returns.

  3. Such a great breakdown! I've always been tempted to try day trading, but it seems so overwhelming to get into!

  4. Investing can be such a hopeful yet thoughtful process because it's filled with ups and downs. But I'm glad your investment has been okay.

  5. Interesting article. I know very little about investing so I can use all the help I can get.

  6. Thank you for this insight. Now I know quite a bit more about mutual funds in general and this one in particular.

  7. At one point I was looking into getting into options trading as a I have both a mathematical and programming background. This looks like a great fund to possibly try.


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