When it comes to investing in small-cap funds, choosing the right one can significantly impact your portfolio’s performance. Small-cap funds, known for their potential high returns and higher risk, are appealing to investors looking for growth opportunities. But choosing the right fund to invest into can be a stressful task, especially if it’s between Quant Small Cap Fund and Nippon India Small Cap Fund. As both funds have their own investment styles, returns, and potential long-term benefits. This article delves into a comparative analysis of Quant Small Cap Fund vs Nippon India Small Cap Fund funds to help you discover which fund may be a better choice for you.
Quant Small Cap Fund vs Nippon India Small Cap Fund
| Scheme Name | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| Fund | Nippon India Small Cap Fund - Growth Plan - Growth Option | Quant Small Cap Fund-Growth |
| Investment Plan | Growth | Growth |
| Level of Risk | Very High | Very High |
| Asset Size (Cr) | ₹56470 Cr | ₹22970 Cr |
| NAV | ₹175.06 | ₹272.76 |
| AUM (in Cr.) | ₹56,470 | ₹22,970 |
| Min Investment | ₹5000 | ₹5000 |
| Min SIP Investment | ₹100 | ₹1000 |
| Min Additional Investment | ₹1000 | ₹1000 |
| Launch Date | 05 Sep 2010 | 24 Nov 1996 |
| Category | Small Cap | Small Cap |
| Fund Type | Open-ended | Open-ended |
| Benchmark | NIFTY Smallcap 250 TRI | NIFTY SMALLCAP 250 TRI |
| Expense Ratio | 1.51 | 1.71 |
| Expense Ratio (%) | 0.64 | 0.64 |
| Turnover | 20% | 162% |
| Manager | Samir rachh | Sanjeev Sharma |
| ISIN Code | INF204K01HY3 | INF966L01AA0 |
| Exits Load | Exit load of 1% if redeemed within one year. | Exit load of 1% if redeemed within one year. |
Video: https://www.youtube.com/embed/03oqjfx9N8o
- Objective: The Quant Small Cap Fund aims to provide long-term capital appreciation by primarily investing in equity and equity-related instruments of small-cap companies.
- Investment Strategy: The fund follows an active management approach, focusing on identifying growth opportunities in the small-cap segment.
- Risk Level: High, due to exposure to small-cap stocks which are generally more volatile.
- Expense Ratio: Generally has a competitive expense ratio, reflecting its active management and focus on high-growth small-cap stocks.
- Suitability: Ideal for aggressive investors with a high-risk tolerance and a long-term investment horizon. Suitable for those looking to capitalize on the growth potential of small-cap stocks and willing to withstand market volatility.
- Objective: The Nippon India Small Cap Fund seeks to generate long-term capital appreciation by predominantly investing in small-cap stocks.
- Investment Strategy: The fund employs a bottom-up stock picking approach, emphasizing companies with robust business models and strong growth potential.
- Risk Level: High, consistent with the inherent volatility of small-cap stocks.
- Expense Ratio: Slightly higher expense ratio, justified by the fund’s consistent performance and detailed research approach in selecting stocks.
- Suitability: Suitable for investors seeking high growth but with a slightly more balanced risk approach. Ideal for those looking for exposure to small-cap stocks with a focus on fundamentally strong companies and a diversified portfolio.
Performance Comparison - Quant Small Cap Fund vs Nippon India Small Cap Fund
Lumpsum Returns Analysis
| Scheme Name | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| 1 Month | 18.22% | 15.61% |
| 6 Months | 25.46% | 25.71% |
| 1 Year | 60.5% | 68.48% |
| 3 Year | 33.77% | 32.48% |
| 5 Year | 34.55% | 42.9% |
Key Takeaways:
- Lumpsum investments are more profitable for Quant Small Cap Fund than the Nippon India Small Cap Fund.
- Nippon India Small Cap Fund focuses on growth, while Quant Small Cap Fund focuses on both growth and value investing.
SIP Return Analysis
| Scheme Name | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| 1 Year | 21.73% | 24.73% |
| 3 Year | 64.56% | 68.93% |
| 5 Year | 156.91% | 208.85% |
Key Takeaways:
- Over the course of 5 years, the Quant Small Cap Fund offers significantly higher returns than Nippon India Small Cap Fund.
- However, over the course of 10 years, both the funds end up offering similar returns, while Nippon India Small Cap Fund lags slightly.
Rolling Returns Analysis
| Scheme Name | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| 1 Year | 32.07% | 27.75% |
| 3 Year | 26.49% | 20.09% |
| 5 Year | 21.64% | 14.54% |
Key Takeaways:
- Rolling returns provide a snapshot of what a fund’s performance has been like over different periods.
- Since Nippon India Small Cap Fund focuses on long-term growth, it has shown higher rolling returns across all schemes than Quant Small Cap Fund.
Risk Management
| Scheme Name | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| Standard Deviation | 14.53% | 18.63% |
| Sharp | 1.65% | 1.36% |
| Beta | 0.79% | 1.01% |
| Alpha | 8.82% | 5.91% |
Historical Returns:
- Quant Small Cap Fund: This fund has shown impressive returns in bullish market conditions due to its active management and growth-oriented approach. However, it may experience significant fluctuations during market downturns.
- Nippon India Small Cap Fund: Known for its consistent performance, this fund has managed to deliver strong returns over the years. It focuses on identifying high-growth small-cap companies, leading to substantial gains during market upswings.
Volatility:
- Quant Small Cap Fund: High volatility, as the fund takes active bets on small-cap stocks, which can lead to significant price swings.
- Nippon India Small Cap Fund: Also high volatility, but the fund's diversified approach can help mitigate some risks.
Risk-Adjusted Returns:
- Quant Small Cap Fund: High potential returns come with high risk. Suitable for investors with a high risk appetite and long-term investment horizon.
- Nippon India Small Cap Fund: Offers a balance of risk and reward, appealing to investors looking for high growth with a slightly more conservative approach compared to its peers.
Portfolio Composition of Quant Small Cap Fund vs Nippon India Small Cap Fund
Quant Small Cap Fund:
- Diversification: Broadly diversified across various sectors, with a focus on high-growth small-cap stocks.
- Top Holdings: Includes companies with strong growth potential and emerging business models.
- Sector Allocation: Dynamic, with sector allocation based on market opportunities and the fund manager’s outlook.
Nippon India Small Cap Fund:
- Diversification: Well-diversified across multiple sectors and industries.
- Top Holdings: Features companies with robust fundamentals and growth prospects.
- Sector Allocation: Focus on sectors with high growth potential, including technology, consumer goods, and industrials.
Asset Allocation
| Type | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| Equity | 95.98% | 95.10% |
| Debt | 0.02% | 1.01% |
| Cash & Cash Eq. | 4.00% | 3.89% |
Key Takeaways:
- Both the funds primarily invest in equities, with Nippon India Small Cap Fund investing 95.98% of their assets and Quant Small Cap Fund investing 95.10% to equity holdings.
- Quant Small Cap Fund holds a slightly higher percentage of debt instruments than Nippon India Small Cap Fund.
Market Cap Allocation
| | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| No. of Stocks | 215 | 93 |
| Large Cap | 5.66% | 13.84% |
| Mid Cap | 10.19% | 6.96% |
| Small Cap | 55.09% | 47.39% |
Key Takeaways:
- Nippon India Small Cap Fund holds more stocks (205) than Quant Small Cap Fund (100).
- Both funds invest the most in small-cap companies, with Nippon India Small Cap Fund allocating 55.09% and Quant Small Cap Fund allocating 47.39% of their portfolio to small-cap companies.
- Quant Small Cap Fund invests in large-cap companies (13.84%) more than Nippon India Small Cap Fund (5.66%).
Sector Allocation
| Sector | Nippon India Small Cap Fund - Growth | Quant Small Cap Fund - Growth |
| Capital Goods | 18.76 | 4.10 |
| Financial | 12.59 | 13.14 |
| Services | 9.78 | 10.14 |
| Healthcare | 7.97 | 8.95 |
| Consumer Staples | 7.30 | 6.56 |
| Chemicals | 6.80 | 3.34 |
| Technology | 6.22 | 0.41 |
| Automobile | 6.02 | 2.43 |
| Construction | 3.57 | 9.66 |
| Metals & Mining | 3.54 | 9.31 |
| Materials | 3.27 | 1.66 |
| Textiles | 3.00 | 3.87 |
| Communication | 1.81 | 4.16 |
| Diversified | 1.49 | 0.43 |
| Energy | 0.84 | 16.14 |
| Insurance | 0.35 | 0.78 |
| Consumer Discretionary | 2.67 | 0 |
Key Takeaways:
- Both funds have significant allocation of their assets in capital goods, financial services, and services.
Conclusion
Both the Quant Small Cap Fund and the Nippon India Small Cap Fund offer attractive opportunities for investors looking to capitalize on the growth potential of small-cap stocks. The Quant Small Cap Fund is well-suited for aggressive investors willing to take on higher risk for potentially higher returns. In contrast, the Nippon India Small Cap Fund offers a more balanced approach, making it suitable for investors seeking high growth with a diversified portfolio and slightly lower risk.
When choosing between these funds, consider your risk tolerance, investment horizon, and financial goals. As both the funds have their own strong points and weaknesses. So consulting with a financial advisor can also help ensure that your investment choice aligns with your overall portfolio strategy.
