Small-cap mutual fund gives CAGR of 28%, 11% alpha return since inception

Edelweiss Small Cap Fund fact sheet

In last one year, Edelweiss Small Cap Fund has delivered 6.35 per cent annual return whereas category return in this period is 5.40 per cent. In last two years, this small-cap mutual fund has given 40.58 per cent annual return whereas absolute return given in this period is around 98 per cent. So, an investors’ money got almost doubled in Edelweiss Small Cap Fund in last two years. Catetgory return in last two years was at 40.76 per cent. Likewise, in last three years, Edelweiss Small Cap Fund has delivered 31.40 per cent annual returns while its absolute return in this period stands at around 127 per cent. Category return in this period is at 28.55 per cent.

However, since its inception in February 2019, this small-cap equity mutual fund has yielded annual return of 28.10 per cent whereas its absolute return is at whopping 146 per cent. The category return in this period is 17.10 per cent.

SIP calculator

As per the Value Research data, this 5-star rated small-cap mutual fund has expense ratio of 2.16 per cent in last one year. If an investor had stareted monthly systematic investment plan (SIP) of ₹10,000 one year ago, the absolute value of one’s investment could have been ₹1,26,423. If the investor had this ₹10,000 monthly SIP in this 5-star rated plan two years ago, its ₹10,000 monthly SIP would have grown to ₹3,06,854. Similarly, if an investor had started this SIP three years ago, its ₹10,000 monthly SIP would have grown to ₹5,94,110.

Should you invest now?

Speaking on Edelweiss Small Cap Fund, Nidhi Manchanda, a certified financial planner said, “Edelweiss Small Cap Fund is one of the best funds under Small Cap fund category as it has helped investors to more than double their money in around 3 years. Along with high returns, the fund has controlled the upward and downward volatility. It has a beta of 0.82, which indicates lower volatility and low market risk. It has beaten the benchmark returns with a positive alpha of more than 10 per cent.”

Advising mutual fund investors to choose this fund in SIP mode, the certified financial planner said, “It is suitable for investors planning to start an SIP for their long-term goals. Investors with an investment horizon of at least 5 years can opt for this fund. Instead of lumpsum investment, it is suggested to start an SIP or park the lumpsum in a short-term Debt Fund and start an STP in this fund. This is to avoid high exposure to equity at one go and instead diversify it over time.”