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A study done by Trust Mutual Fund reveals that the small cap universe gave 60 multibaggers in the last 5 years.
The fund house says that 60 small cap companies gave 5x returns in 5 years compared to 27 midcap companies and 6 large cap companies in the corresponding period.
Further, 124 small cap companies gave 3x returns in 5 years.
In addition, the fund house said that while 3 small cap companies have become large cap, 43 small cap companies transitioned to mid cap companies over the last 10 years.
The fund house shared this data during the launch of TRUST MF Small Cap Fund, an open-ended equity scheme that focuses on small-cap stocks. The NFO opened on October 11 and closes on October 25.
Sandeep Bagla, CEO, Trust MF said that the small cap offers exposure to new age companies. He said, “The small-cap market offers a vast array of investment choices, including sectors like consumption, financialization and physical asset creation, which we believe have a long runway for growth."
Talking about the valuation of small cap companies, Mihir Vora, CIO, TRUST MF, said that small cap companies are available at reasonable valuation; however, across select pockets. Giving an example, he said that defence and chemicals are available at attractive valuations.
Mihir said that a few sectors like consumer durables, hospitality and electricals are available in the small cap universe.
