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| Capitalstars Investment Advisor |
Historically, it has been observed that small-sized companies tend to do well — many a time outperforming large-cap companies — when earnings rally kicks in.
After a massive underperformance of the BSE Small-Cap index to Sensex since January 1, 2018 to August 31, 2019 by 45%, the trend seems to have reversed. In the past two months, BSE 500, BSE Midcap and BSE Smallcap indices have returned 10.3%, 12.2% and close to 10%, respectively, outperforming the Sensex’s 9.7%. Before September, 80% stocks of the BSE 500 index were in the red — indicating a broader market rally. Hence, it makes sense to increase exposure to quality small cap schemes.
Historically, it has been observed that small-sized companies tend to do well — many a time outperforming large-cap companies — when earnings rally kicks in. Investors who believe in this historical trend can consider investing in small-cap schemes. But it may take a long time for this trend to materialize. Hence, such investors need to exercise patience and have an investment horizon of 5 to 10 years. The reasons include markets being at all-time highs and earnings recovery remains uncertain, at least in the foreseeable future.
Among the small-cap schemes, investors can consider SBI Small Cap Fund. The scheme has been a stellar performer, beating its benchmark and peers by a fair margin. In the past 5- and 10-year periods, the scheme has given 17% and 18% returns, while its peer schemes are way behind as they have given returns of 8% and 13% during the same periods, respectively. Fund manager R Srinivasan is known to spot small-cap companies with good management quality and stable return ratios. This scheme is recommended for investors who believe in market wisdom of high risk fetches high rewards
Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927
Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
For more details call on 9977499927 or visit our website www.capitalstars.com
