Which small-caps should I invest in?
Your five SIPs should comprise of two large- cap funds, one mid-cap fund, and one flexi-cap fund, while the last one can be in a small- cap fund.
I want to invest in mutual funds (MFs) through a systematic investment plan (SIP). Please suggest a couple of good small-cap funds.
—Anthony Fernandez
Investing via monthly SIPs is the best way to achieve your medium and long term goals, be it the education and marriages of your children, retirement plans, etc.
Since you are starting your investment journey in MFs, do note that investing in a small-cap fund carries a higher risk.
We would also recommend you to split your investment amount in five SIPs of equal amounts. For example, if you are planning to invest 10,000 every month, then you should divide this amount in five SIPs of 2,000 each. Your five SIPs should comprise of two large- cap funds, one mid-cap fund, and one flexi-cap fund, while the last one can be in a small- cap fund.
As for small-cap fund, you may choose either of the following schemes: Kotak Small Cap Fund or Nippon India Small Cap Fund.
Another important point to keep in mind is that you must have a long-term time horizon of at least seven years or longer.
Rajiv Bajaj is chairman & MD, BajajCapital.
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First Published:10 May 2023, 09:17 PM IST
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