Investing in small-cap mutual funds can feel like trying to find the best street food in a bustling market like Chandni Chowk. You can get a taste of unique and exciting flavours, but not without navigating some narrow, crowded lanes. Food may be great but you may also suffer from indigestion or worse.
This is why I compare Small-cap mutual funds to spicy street food – tantalising and full of potential, but they come with a fair share of volatility, like a surprise splash of extra chillies. For instance, the small-cap index barely moved between 2008 and 2018, teaching us that merely being in the space doesn’t guarantee returns.
The ‘Roots & Wings’ philosophy of Jama Wealth comes handy here. Think of your investment as a tree. ‘Roots’ signify strong fundamentals, while ‘Wings’ represent the potential to fly high. So, in the small-cap space, having clear insights on corporate governance and sustainable practices are as important as the potential for high returns.
While you navigate this space, two mutual funds have proven to be like the best-known food stalls – consistent, reliable, and well-received. They are Nippon India Small Cap Fund and Kotak Small Cap Fund. These funds have maintained steady performance, navigating the twists and turns of the small-cap space.
But remember, just like the street food market, the small-cap space also has some rapid stars with sharp practices. Be wary and avoid those.
Investing in small-caps requires a seasoned guide, consider Jama Wealth’s expert investment advisory and PMS services, for help in exploring the tantalising world of small-cap funds with ease and expertise.
