If you are a long-term investor, you would have received this unsolicited advice many times that ‘you should invest in smallcaps for best returns’ in the long term. And to be fair, if you look at the returns of smallcap funds in the last few years, they have indeed delivered on the promises.
If we look at the last three years’ data of smallcap funds (with at least 3 years of vintage), then here is what they have achieved:
- In the last 1-year period, the best and worst smallcap funds have delivered a return of 75.0% and 41.4% respectively. In comparison, the largecap index of Nifty 50 has given 28.15%.
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