HDFC Small Cap Fund

HDFC Small Cap Fund in Brief

HDFC Small Cap Fund was launched on 03/04/2008, which means it has been in existence for more than 13 years. And currently, this fund manages an AUM of Rs 13,182.11 Cr (as of Oct 31, 2021).

HDFC Mutual Fund manages the HDFC Small Cap Fund. HDFC Mutual Fund is a joint venture between Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI). Housing Development Finance Corporation Limited (HDFC) owns 52.6% of the company, and Standard Life Investments Limited (SLI) owns 16.2%.

HDFC Small Cap Fund is managed by Mr. Chirag Setalvad and Mr. Sankalp Baid. Mr. Setalvad has been managing this fund since 2014, and Mr. Baid has been managing it since Jan 2021. 

Types of Funds

This scheme offers two types of plan: 

• Growth plan – there are two options available here: Regular-Growth and Direct-Growth

  • Regular growth plans are usually costlier than direct because they have intermediaries involved, such as mutual fund distributors, while the direct plan does not have any such intermediaries.

  • With a Direct-Growth plan, you can directly buy the units of any fund from the AMCs. This direct purchase reduces your cost and hence can improve your overall return.

• IDCW (Income Distribution cum Capital Withdrawal) – there are the following sub-options: 

  • Payout of IDCW Option 

  • Reinvestment of IDCW Option

Investment Objective

The investment objective of HDFC Small Cap Fund is to generate income or capital appreciation for its investor. It does so by following a strategy of investing in small-cap stocks of small-cap companies.

The fund manager follows a stock selection strategy to select stocks of the following:

• Businesses having a good financial strength 

• Companies having a reasonable return on equity or ROE

• Organizations trading at good valuations

• Sustainable business models having a competitive advantage over their peers

• Businesses that are operated and managed by great managers

Fund Summary

1. HDFC Small Cap Fund (Regular–Growth):

   • Expense ratio - 1.83% (as of Oct 31, 2021 )

   • Exit Load - 1.0% (If redeemed or switched out before 12 months from the date of allotment)

   • AUM (Fund Size) - ₹ 13182.11 Cr (As of Oct 31, 2021)

   • Lock-in period - No Lock-in period

   • Age of the fund - The HDFC Small Cap Fund (Regular–Growth) was launched on 03/04/2008

   • Benchmark Index - NIFTY Smallcap 100 (Total Returns Index)

   • Minimum Investment Amount- ₹ 5,000, then any amount thereafter 

   • Additional Purchase - ₹ 1,000 and any amount thereafter

2. HDFC Small Cap Fund (Direct-Growth):

   • Expense ratio - 0.83% (as of Oct 31, 2021 )

   • Exit Load - 1.0% (If redeemed or switched out before 12 months from the date of allotment)

   • AUM (Fund Size) - ₹ 13182.11 Cr (As of Oct 31, 2021)

   • Lock-in period - No Lock-in period

   • Benchmark Index - NIFTY Smallcap 100 (Total Returns Index)

   • Minimum Investment Amount - ₹ 5,000, then any amount thereafter 

   • Additional Purchase - ₹ 1,000 and any amount thereafter

Fund Return Summary

1. Returns of HDFC Small Cap Fund (Regular–Growth) (as of Nov 27, 2021):

   Period	Scheme Returns
   1 year	69.54%
   3 years	20.03%
   5 years	20.01%
   Since Inception	15.49%

   *Returns are subject to change. The investment risk in the investment portfolio is borne by the policyholder.

2. Returns of HDFC Small Cap Fund (Direct-Growth) (as of Nov 27, 2021):

   Period	Scheme Returns
   1 year	71.18%
   3 years	21.29%
   5 years	21.4%
   Since Inception	19.77%

   *Returns are subject to change. The investment risk in the investment portfolio is borne by the policyholder.

Pros and Cons

The following table gives some insights into the pros and cons of the HDFC small cap fund:

Benefits of HDFC Small Cap Fund

Some benefits of the fund you must consider are:

• Small-Cap Stocks – Small-cap stocks have higher potential as compared to mid or large-cap to deliver more returns because of the high market volatility involved.

• Long term Investments – Long term investment helps create wealth with the help of compounding, which further multiplies the capital manifold.

• Affordable Expense Ratio – An affordable expense ratio means higher returns on the investment as it means that you will have to pay a small sum to the fund house for managing your funds.

• Good Returns with Consistent Performance – The HDFC Small Cap Fund has performed consistently and has delivered good returns over time. For example, since its inception, it has delivered a 19.77% CAGR (Compound Annual Growth Rate) return for a direct-growth plan.

• Diversified Portfolio – In this scheme, the investments are strategically diversified throughout the small-cap segment to mitigate market volatility risks as much as possible.

HDFC Small Cap Fund: Asset Allocation by Sector 

(as of Jun 30 2021)

HDFC Small Cap Fund: Asset Allocation by Market Capitalization 

(as of Jun 30, 2021)

Portfolio Statistics of the HDFC Small Cap Fund

(as of Sept 30, 2021)

Who Should Invest in the HDFC Small Cap Fund?

The following category of investors can invest in HDFC Small Cap Fund:

• Individuals willing to take high-risk

• Investors looking for exposure in the small-cap segment of the equity markets

• Individuals looking for long term capital appreciation or income through stocks

FAQ's