Small-cap funds invest in companies with market capitalization below Rs. 5,000 crores, offering high growth potential but also carrying higher risks due to volatility.
Features Of Small Cap Funds
Small-cap funds offer high risk-reward, are volatile, have a wide opportunity range, and have a shorter track record. They are liquid and allow lump sum or SIP investments.
Risks associated with small-cap funds
These funds are riskier due to active investment in new companies and the potential for high volatility but offer exposure to innovative firms.
Who Should Invest In Small Cap Mutual Funds?
Small-cap funds: ideal for aggressive investors seeking long-term growth and diversification, despite higher risk and volatility.
Tax On Small Cap Mutual Funds
Small-cap fund returns: 15% tax if held ≤ 12 months, 10% for >12 months; long-term tax only on gains over ₹1 lakh.
Check out our blogon small-cap companies to know more.