Misleading information on small cap funds. If someone has 10+ years of investment horizon, small caps generally provide better returns. Obviously one has to invest as per their risk appetite, but saying small caps are bad is simply conveying incorrect information.
Smallcap funds are not bad but, These are more volatile compared to large and midcap funds. He also mentioned this one. It should be longer time period ( more than 15 years ) to minimise risk in small cap funds.
Great work. but ET money comments on the small-cap are not clear and confusing. It would be really great if we get a clear answer to " Is investing in a small cap fund (more than 10-15 years) better than a large/midcap fund/ index fund?".
I totally disagree with the small cap fund one. There is a specific reason behind it. As you all know that small cap companies moves up faster than large cap ones, so mutual fund houses can just pour in money and jack up prices like hell. When AMC houses pour money on a certain small cap company, that stock price rises significantly. Likewise, if we see the average of smallcap 250, it will always be of lower performance.
Hi Sandipan, Mutual Funds don't invest how you are mentioning. They are professionals who look at everything before deciding where to invest. Of course some small caps might do well and deliver better than the benchmark, and we have mentioned active funds with their returns. But top funds in the small cap category keep changing. And so if you can predict what fund will do well in the future, please go ahead and pick.
Some Disagree. 1. Sector fund can be good investment at times. Consider present condition IT index all drawdown stage. Any one invest in IT index at present & accumulate for next six month going to get 30-32% return in 2 years time. Identify sector rotation and invest timely. 2. Small cap like - SBI, Quanta MF provided better return than any large cap return until now. Again a portfolio relocation frequently will provide good return. 3. Multicap is shit fund agreed. There is no point to married to any stock or MF for life long. We should be smart enough to handle our money wisely by doing reallocation of our on portfolio (allocation of fund on different category) timely and get optimum return. If people have no time to look after their investment better buy NIFTY index fund will provide decent return than most of the mutual funds.
Clear explanation thanks!! But when it comes to an active small cap funds investment, we need to wait more than 5 to 7 years of longer horizon then we will good return in active small cap funds.
I have 3 scenarios. Which one gives max returns? 1. SIP of 10k in 1 MF for 20 years 2. SIP of 10k in 2 MFs for 20 years (5k each) 3. SIP of 10k in 1st MF for first 10 years, then SIP of 10k in 2nd MF for next 10 years In all scenarios, amount is withdrawn only only 20 years. And suppose, returns are same for both funds. Note, same amount invested in all 3 cases.
2nd one is good... it is better to increase the amount with time... not sticking to the 10K one. Also, it is good to buy some dividend stocks at certain interval
@@kkkk16458 in first case, risk is high. In second case, risk is diversified. In third case, your compounding time frame is reduced. So, in your case study, 2nd one is best amongst the three.
@@sandipankhan1994 thanks Sandipan. I got your point. If you don't mind, can you let me know which one gives the most returns if the interest rate is same through out 20 years. This is just for my knowledge purpose only.
@@kkkk16458 Thanks again. I just want to use your case study on my TH-cam channel... if you don't mind. Coming to your question, if interest rate is same for all mutual funds, then which ever fund you choose, the returns will be same. Now in your snippet case 1st one will be best as interest rate is fixed now as I don't have to hunt for any particular fund now. My 10K is going to a fund for a particular period for 20 years. No hassles.
There is something called profit booking when the market achieves its peak as you have to manage and withdraw the profits, so you can reinvestment along with the lowest amount SIP, when there is a huge Dip or when the market trend goes downwards. Also invest via SIP with the low amount of investment (like 1 or 2k per MF), when the market is average or high. So we have to monitor the MF's or stocks every day for atleast 30 minutes in the morning and in the evening. There are several investors who talk about long term and also advice retail investors as to not to time the market, but the reality is if you go through their portfolio, they usually time the market and make investments accordingly (Example - Warren Buffet). Also if you wanted to get high returns like 16 to 20% returns every year, you have to book profits whenever, the market goes high (like now in 5th July'23). Retail investors who pretends that they keep doing SIP for long term and do not care for current profits and wish to with draw after 10 or 20 years will only get low profits like around 10%, and they miss the chance to acquire double returns within 5 to 6 years.
No one becomes rich by just being in the market for long, one has to be in the right place, right time and in right way .....just like someone doing fishing in waters...Jst standing for long in waters , and not watching carefully, will gain nothing .
Not a complete coverage of topic here, might be misleading for new investors. Each MF is structured and managed in a very different way. And also how it plays as a part of overall portfolio is not explained. This video probably helps new & conservative investors. For long term and a better growth strategy, most will need these Sectoral/ Thematic funds to be a part of their portfolio.
All avoidable funds shall be made a part of satilite portfolio... Not Core.... Often there is contradiction in back to back videos... However overall info. is satisfactory
Yes.. misleading information on small cap and multicap... smallcap on longer run gives better run comparing to other schemes and muticap with proportion to all caps gives better returns even in bear times...this video can mislead a newcomer to mutual funds and stay away from some good categories
Hi Madhavan, Unfortunately, data says otherwise. While the conventional wisdom is that small caps can deliver better returns for the risk you are taking, that hasn't happened. On Multi-cap, here is a situation to consider. If the small caps or even large caps look overvalued and have a high chance of falling, would you still want to be in them? or would you prefer the flexibility to reduce the exposure and be in the part of a market that has better prospects? Flexi cap Fund Managers have that flexibility and so we believe they are better for most investors.
@@ETMONEYif that is the case, then why all the flexicaps fund managers keeps mostly largecap in the portfolio. In the name of Flexicap they are running extended large cap funds only.
@@ETMONEY But Flexi Cap approach introduces yet another risk which is the fund manager itself. Granted this risk remains across all actively managed funds, but if I need to go with an actively managed fund then why not get a flavour of the entire market instead of leaving it to the fund manager. Does ET Money have any back-tested data which proves that Flexi Caps have beaten Multi Caps across all market cycles? This would be interesting. In any case if I had presented this video, I would have advised everyone to just stick to what John Bogle said - buy the market and hold it forever.
I agree to most of your videos but here the title of the video is little bit misleading. Are you saying don't ever invest in Small Cap? I think what you want to say is if you are investing in these category funds first study the investment pattern and then take the decision.
Hi Vicky, We are saying that the conventional wisdom that higher risk in small cap leads to higher returns is not holding true when you look at the data.
Hi Bala, There are index funds that give you exposure to different parts of the marked. If you are looking to invest in big companies, than you can pick large-cap index funds (like Nifty 50 index funds); for mid-sized companies, you can take Mid Cap index funds (like Mid cap 150 index funds), and so on.
Hi Team, Please put more videos with good content.. It will help to improve users .. I personally recommended to 50 friends but still needed a more awareness
Please study more on how smallcap index work, the universe is huge - thus the MFs performance is not comparable to index. Most good smallcap companies move out to mid cap, thus keeping overall index CAGR low.
not a great content, if you look into long run any decent equity is capable of giving around 13% and none can beat this , even the worst equity fund on long run can perform well
Hi, We completely agree on your point of picking a decent equity fund and that's what we are also saying in this video. Why go for exotic MF like sectoral or thematic etc. when you can keep it simple and earn good returns
Do not think about whether market is low or high when going with Sip But Try to do a lumpsum in ongoing Sip when market is down to about 5% like right now
Misleading information on small cap funds. If someone has 10+ years of investment horizon, small caps generally provide better returns. Obviously one has to invest as per their risk appetite, but saying small caps are bad is simply conveying incorrect information.
Hi,
Unfortunately, data says otherwise.
In small cap segment risk is guaranteed but not returns🤣
Datas are sold to people like you for consumption!
@@arindambiswas6868 We actually do our data digging to find if something most people believe is true is actually true or not.
Smallcap funds are not bad but, These are more volatile compared to large and midcap funds. He also mentioned this one. It should be longer time period ( more than 15 years ) to minimise risk in small cap funds.
Why Shankar Nath is not here? Bring him back please. He was phenomenal.
Great work. but ET money comments on the small-cap are not clear and confusing. It would be really great if we get a clear answer to " Is investing in a small cap fund (more than 10-15 years) better than a large/midcap fund/ index fund?".
I totally disagree with the small cap fund one. There is a specific reason behind it. As you all know that small cap companies moves up faster than large cap ones, so mutual fund houses can just pour in money and jack up prices like hell. When AMC houses pour money on a certain small cap company, that stock price rises significantly. Likewise, if we see the average of smallcap 250, it will always be of lower performance.
Hi Sandipan,
Mutual Funds don't invest how you are mentioning. They are professionals who look at everything before deciding where to invest.
Of course some small caps might do well and deliver better than the benchmark, and we have mentioned active funds with their returns. But top funds in the small cap category keep changing. And so if you can predict what fund will do well in the future, please go ahead and pick.
@@ETMONEY Then why most of ET Money Genius Portfolios have small cap allocation? Please justify.
Some Disagree.
1. Sector fund can be good investment at times. Consider present condition IT index all drawdown stage. Any one invest in IT index at present & accumulate for next six month going to get 30-32% return in 2 years time. Identify sector rotation and invest timely.
2. Small cap like - SBI, Quanta MF provided better return than any large cap return until now. Again a portfolio relocation frequently will provide good return.
3. Multicap is shit fund agreed.
There is no point to married to any stock or MF for life long. We should be smart enough to handle our money wisely by doing reallocation of our on portfolio (allocation of fund on different category) timely and get optimum return. If people have no time to look after their investment better buy NIFTY index fund will provide decent return than most of the mutual funds.
Clear explanation thanks!! But when it comes to an active small cap funds investment, we need to wait more than 5 to 7 years of longer horizon then we will good return in active small cap funds.
I have 3 scenarios. Which one gives max returns?
1. SIP of 10k in 1 MF for 20 years
2. SIP of 10k in 2 MFs for 20 years (5k each)
3. SIP of 10k in 1st MF for first 10 years, then SIP of 10k in 2nd MF for next 10 years
In all scenarios, amount is withdrawn only only 20 years. And suppose, returns are same for both funds.
Note, same amount invested in all 3 cases.
2nd one is good... it is better to increase the amount with time... not sticking to the 10K one. Also, it is good to buy some dividend stocks at certain interval
@@sandipankhan1994 but can you tell me which one gives better returns ? Just for learning purpose I'm asking this.
@@kkkk16458 in first case, risk is high.
In second case, risk is diversified.
In third case, your compounding time frame is reduced.
So, in your case study, 2nd one is best amongst the three.
@@sandipankhan1994 thanks Sandipan. I got your point. If you don't mind, can you let me know which one gives the most returns if the interest rate is same through out 20 years. This is just for my knowledge purpose only.
@@kkkk16458 Thanks again. I just want to use your case study on my TH-cam channel... if you don't mind.
Coming to your question, if interest rate is same for all mutual funds, then which ever fund you choose, the returns will be same. Now in your snippet case
1st one will be best as interest rate is fixed now as I don't have to hunt for any particular fund now. My 10K is going to a fund for a particular period for 20 years. No hassles.
Entry & Exit matters for Sectoral/ Thematic...
If we are good to play cycle their returns will surprise...
@ET Money May i know why GENIUS invests in small cap index fund
Quantitative Thematic funds are sector and mkt cap agnostics --hence as diversified as any div fund
Sir
I admire you for being truthful, databacked metoducql professional exhibiting intellectual modesty
Thank you
There is something called profit booking when the market achieves its peak as you have to manage and withdraw the profits, so you can reinvestment along with the lowest amount SIP, when there is a huge Dip or when the market trend goes downwards. Also invest via SIP with the low amount of investment (like 1 or 2k per MF), when the market is average or high. So we have to monitor the MF's or stocks every day for atleast 30 minutes in the morning and in the evening. There are several investors who talk about long term and also advice retail investors as to not to time the market, but the reality is if you go through their portfolio, they usually time the market and make investments accordingly (Example - Warren Buffet). Also if you wanted to get high returns like 16 to 20% returns every year, you have to book profits whenever, the market goes high (like now in 5th July'23). Retail investors who pretends that they keep doing SIP for long term and do not care for current profits and wish to with draw after 10 or 20 years will only get low profits like around 10%, and they miss the chance to acquire double returns within 5 to 6 years.
No one becomes rich by just being in the market for long, one has to be in the right place, right time and in right way .....just like someone doing fishing in waters...Jst standing for long in waters , and not watching carefully, will gain nothing .
Not a complete coverage of topic here, might be misleading for new investors.
Each MF is structured and managed in a very different way. And also how it plays as a part of overall portfolio is not explained.
This video probably helps new & conservative investors. For long term and a better growth strategy, most will need these Sectoral/ Thematic funds to be a part of their portfolio.
All avoidable funds shall be made a part of satilite portfolio...
Not Core....
Often there is contradiction in back to back videos...
However overall info. is satisfactory
On small caps, the data looks wrong, and what is average return? Why not look at CAGR? Category average cagr is 21% for last 10 years
Great presentation, Very well explained at a steady pace. Thanks
Yes.. misleading information on small cap and multicap... smallcap on longer run gives better run comparing to other schemes and muticap with proportion to all caps gives better returns even in bear times...this video can mislead a newcomer to mutual funds and stay away from some good categories
Hi Madhavan,
Unfortunately, data says otherwise. While the conventional wisdom is that small caps can deliver better returns for the risk you are taking, that hasn't happened.
On Multi-cap, here is a situation to consider. If the small caps or even large caps look overvalued and have a high chance of falling, would you still want to be in them? or would you prefer the flexibility to reduce the exposure and be in the part of a market that has better prospects?
Flexi cap Fund Managers have that flexibility and so we believe they are better for most investors.
@@ETMONEYif that is the case, then why all the flexicaps fund managers keeps mostly largecap in the portfolio. In the name of Flexicap they are running extended large cap funds only.
@@ETMONEY But Flexi Cap approach introduces yet another risk which is the fund manager itself. Granted this risk remains across all actively managed funds, but if I need to go with an actively managed fund then why not get a flavour of the entire market instead of leaving it to the fund manager.
Does ET Money have any back-tested data which proves that Flexi Caps have beaten Multi Caps across all market cycles? This would be interesting.
In any case if I had presented this video, I would have advised everyone to just stick to what John Bogle said - buy the market and hold it forever.
I agree to most of your videos but here the title of the video is little bit misleading. Are you saying don't ever invest in Small Cap? I think what you want to say is if you are investing in these category funds first study the investment pattern and then take the decision.
Hi Vicky,
We are saying that the conventional wisdom that higher risk in small cap leads to higher returns is not holding true when you look at the data.
What are the type of index fund in which fund is better for my money growth
Hi Bala,
There are index funds that give you exposure to different parts of the marked. If you are looking to invest in big companies, than you can pick large-cap index funds (like Nifty 50 index funds); for mid-sized companies, you can take Mid Cap index funds (like Mid cap 150 index funds), and so on.
How about infra sector funds ?
Very nice explanation for retail investors like us... Learnt a lot... Thank you 🙏🙏🙏
Summary please. Whoever posts will meet with a good luck and stock market gains. :)
Hi Team, Please put more videos with good content.. It will help to improve users .. I personally recommended to 50 friends but still needed a more awareness
which type of fund goods? which fund is good fund? imm
Please study more on how smallcap index work, the universe is huge - thus the MFs performance is not comparable to index. Most good smallcap companies move out to mid cap, thus keeping overall index CAGR low.
Mistake at 6:15
There is a error at 6:15 - instead of saying SMALL CAP you have mentioned LARGE CAP
Only agree with point 1.
Which fund is better
waste of time. you are slow in delivering details. first tell us which sectors are bad. then start explaining.
But friend ultimately where we will go ?
Thanks for sharing 🙏
not a great content, if you look into long run any decent equity is capable of giving around 13% and none can beat this , even the worst equity fund on long run can perform well
Hi,
We completely agree on your point of picking a decent equity fund and that's what we are also saying in this video. Why go for exotic MF like sectoral or thematic etc. when you can keep it simple and earn good returns
@@ETMONEY me too
Should I invest SIP in falling market ...?
Do not think about whether market is low or high when going with Sip
But Try to do a lumpsum in ongoing Sip when market is down to about 5%
like right now
Do not agree on small capp
Who is this guy. I need the old guy.. this guy is just reading ..
Did he really say to stay away from small cap funds! lol
We didn't. The data did :)
No link in description about "debt fund" video that was told.
Hey! Thanks for pointing it out. The link has been updated in the description.
Good one.
Nice information. Flexi cap funds and debt short term funds are better.
Hi annaya pillala future ki a fund best anna small cap or index funds iam govt employee pls reply
@@lilliput8728 index fund is best
@@lilliput8728 for longterm ayithe smallcap shorterm ayithe index fund
@@sarathsai447 thanks Andi
Completely false and misleading pls show small cap 10 year data active small cap.. Then give your expertise.
Nice 👌👌
You are not correct in MFs, multi cap MFs are very good, so don't put wrong information in mfs
Great information 👍
Good information sir
Thanks
Good content...
This guy looks like an Indian version of Tom Hardy
Hindi mai nhi bol sakte kya
Hi,
Humara hindi channel bhi hain. Aap waha hindi main videos dhek sakte hain