Around 93% of small cap mutual funds failed to beat their benchmarks in April. Only 2 out of 27 schemes managed to outperform, emphasizing the riskiness of small cap investments and the need for a high-risk appetite.
Small cap schemes are benchmarked against Nifty Smallcap 100 - TRI, Nifty Smallcap 250 - TRI, and S&P BSE 250 Small Cap - TRI. The benchmarks gave 32.27%, 36.17%, and 35.08% respectively in the three year horizon.
We considered equity categories such as large cap, mid cap, small cap, multi cap, and ELSS funds. We chose these categories because they were around before the recategorisation of mutual funds by Sebi. We did not consider large & mid cap, focused, flexi cap, value/contra fund as these categories were introduced after the recategorisation.