Small-cap Investments: Fuelling Financial Growth in India’s Emerging Economy

Estimated read time 3 min read

New Delhi [India], February 27: With the evolving scenario of financial markets, investors are on a constant look out for opportunities that promise not only growth but stability as well. The SENSEX soaring beyond 70,000, propelled by the rapid growth of Small cap and Mid cap funds, has sparked heightened interest in small-cap funds. Furthermore, this has prompted the launch of numerous NFOs, enticing investors with unique prospects and potential high returns.

However, navigating the investment landscape can be overwhelming and selecting the right funds can be daunting for investors.

There are many rating agencies that help investors choose the right option, and Morningstar stands out as the most trusted platform for evaluating mutual funds and ULIPs.

In the Mutual Fund category, Morningstar rates Quant Small Cap fund Growth Option Direct Plan & Quant Small Cap fund Growth as the top 2 funds with the best returns in a 3-year period.

For Unit Linked insurance plans (ULIPs), as of 31st Jan ’24, over a 3-year horizon, PNB MetLife ULIP open funds (Individual Fund Category) are ranked amongst the 1st quartile, in all key categories, which includes 3 Equity categories (Large Cap, Multicap, Midcap), Balanced Allocation and Debt category (Medium to Long Duration).

Most recently, as of 6th Feb ’24, PNB MetLife’s five Funds were top-ranked over a 1-year return period across all the five above-mentioned Morningstar categories.

Additionally, 100% of PNB MetLife ULIP funds are rated 4/5 stars, thereby giving consistently better returns to investors.

This achievement not only positions PNB MetLife as a leader in fund management but also proves to be a great catalyst for growth-oriented avenues for investments. In addition to generating leading returns, PNB MetLife boasts of impressive claim settlement ratios of 99.06% for individual customers and 99.70% for group customers in FY 2022-23.

Keeping up with the momentum of the growing financial market, PNB MetLife has launched an NFO of small-cap funds that caters to the evolving needs and requirements of customers. Unlike traditional investment opportunities that involve mutual funds investing in a portfolio of stocks/bonds, PNB MetLife focuses on integrating insurance with investment opportunities, providing investors with a wealth management solution that’s strategic and holistic in nature. PNB MetLife’s NFO aims to help investors secure their financial future while being a part of small-cap companies’ long-term growth opportunities.

Why Small-cap Funds?

Small-cap funds are customised with the risks and financial goals of the investors kept in mind, offering them a portfolio of assets that is diverse and delivers consistent returns over time. These funds provide exposure to dynamic, early-stage companies with high growth potential, often overlooked by larger investors. With a diversified portfolio of small-cap stocks, investors can capitalise on market inefficiencies, economic expansion, and the innovative capacity of smaller companies. While small-cap investing entails higher volatility and risks, those with a long-term investment horizon may benefit from the potential for substantial returns that small-cap funds can offer.

The promising trend in small-cap funds, highlighted by the NIFTY indexes, has created a big opportunity for investments in the stock market of India. And, as investors explore the market’s ongoing challenges, combining investment with insurance funds is only going to prove beneficial in attaining long-term financial goals.

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