81% smallcap mutual funds underperform their benchmarks in 2024 so far

economictimes.indiatimes.com:

mutual funds have underperformed their respective benchmarks in 2024 so far. There were around 27 smallcap mutual fund schemes in the market. Out of 27 smallcap schemes, 22 schemes have underperformed their respective benchmarks. In other words, only five smallcap schemes managed to outperform their respective benchmarks in 2024 so far.

UTI Small Cap Fund, the worst performer in the category, gave 0.54% in 2024 so far against 9.06% by its benchmark (Nifty Smallcap 250 — TRI). Union Small Cap Fund gave 1.64% in 2024 so far.

Best MF to invest

Looking for the best mutual funds to invest? Here are our recommendations.

Among 27 small cap schemes, three schemes gave double-digit returns. Quant Small Cap, the topper in the category, gave 15.59% return in 2024 so far. Bandhan Small Cap Fund and ITI Small Cap Fund gave 10.45% and 10.03% returns, respectively.

Also Read | 40 equity mutual funds double lumpsum investments in three years. Take a look

Nippon India Small Cap Fund, the largest scheme in the category based on assets managed, gave 6.14% in 2024 so far. Kotak Small Cap Fund gave 3.67% against 9.06% by its benchmark (Nifty Smallcap 250 — TRI).

Wondering what was the reason for this underperformance by the small cap schemes? “Small caps had a sharp increase in 2023 and were overvalued. Small caps are those stocks that are ranked 251 and above in market capitalisation, and therefore it is a very large pool for fund managers to select just 40 to 60 stocks. Moreover, the floating stock of small caps is