Investors in the Nippon India Smallcap Fund have seen remarkable returns, especially through systematic investment plans (SIPs), over the last five years. The fund, managed by Nippon India Mutual Fund, is one of the top performers in the smallcap category. Known for its high annualized returns, the Nippon India Smallcap Fund has provided significant wealth growth to investors, regardless of whether they chose a lump sum or SIP investment approach.
With an annualized SIP return of 38.96% over five years, the fund has become an attractive choice for investors looking to multiply their investments in the long run. Here’s a breakdown of how this fund has performed across different timelines and the potential returns investors have enjoyed.
Strong Performance in SIP and Lump Sum Investments
The Nippon India Smallcap Fund has consistently outperformed its benchmark, the Nifty Smallcap 250 TRI, in multiple timeframes. For lump sum investors, the returns over one, three, five, and ten years have been impressive. For SIP investors, the fund has been particularly rewarding, with substantial wealth accumulation even for modest monthly contributions.
Nippon India Smallcap Fund Returns (Lump Sum Investment)
- 1-Year Return: 48.18%
- 3-Year Return: 30.92% per annum
- 5-Year Return: 37.10% per annum
- Returns Since Inception: 22.95% per annum
The benchmark, Nifty Smallcap 250 TRI, shows slightly lower returns:
- 1-Year Return: 51.15%
- 3-Year Return: 26.25% per annum
- 5-Year Return: 32.63% per annum
- Returns Since Inception: 14.73% per annum
Wealth Multiplication Over Five Years
If a lump sum investor had invested ₹1 lakh in the Nippon India Smallcap Fund five years ago, that investment would now be worth approximately ₹4.85 lakh, given the fund’s 37.10% annualized return in five years. Comparatively, a ₹1 lakh investment in the benchmark index would have grown to ₹4.11 lakh. This substantial difference shows the fund’s outperformance in wealth multiplication.
For those who invested in the fund ten years ago, a ₹1 lakh investment would now be valued at ₹7.85 lakh, thanks to its steady growth of around 23% per annum.
SIP Returns Calculation
The Nippon India Smallcap Fund has also provided strong annualized returns for investors using the SIP approach, making it an ideal choice for those looking to invest smaller amounts regularly.
For a monthly SIP of ₹10,000 over five years, the fund has returned 38.96% per annum, turning a total investment of ₹6 lakh into approximately ₹15.46 lakh. Over a ten-year SIP, the fund has provided annualized returns of 26.29%, growing an investor’s total contribution of ₹12 lakh to nearly ₹48.44 lakh.
SIP Returns Breakdown
- 5-Year SIP Return: 38.96% per annum
- Monthly SIP: ₹10,000
- Value After 5 Years: ₹15,46,893
- 10-Year SIP Return: 26.29% per annum
- Monthly SIP: ₹10,000
- Value After 10 Years: ₹48,44,208
Fund Overview and Holdings
Nippon India Smallcap Fund has a diverse portfolio focused on smallcap stocks, which allows it to capture growth opportunities in various sectors. As of September 30, 2024, the fund’s total assets under management stand at ₹62,259.55 crore, with an expense ratio of 0.66%, making it a cost-effective choice for investors.
The fund’s top holdings include stocks from sectors like industrials, materials, consumer discretionary, financials, technology, and consumer staples. Some of its top holdings include:
- HDFC Bank
- Tube Investments
- MCX
- Voltamp Transformers
- Bharat Heavy Electricals Limited
- Kirloskar Brothers
- SBI
The minimum lump sum investment in the fund is ₹5,000, and the minimum SIP contribution is just ₹100, making it accessible to a wide range of investors. The fund has been active since September 16, 2010, and has demonstrated consistent performance over its history.
Market Risks and Investor Advisory
While past performance has been impressive, it’s important to remember that equity funds come with market risks, and returns are not guaranteed. Investors are advised to conduct thorough research and consult financial experts before investing in mutual funds.
