Investing in small-cap mutual funds has become increasingly popular among investors who seek higher long-term returns. One such fund that has made a significant mark is the SBI Small Cap Fund, also known in tracking systems as mutf_in: sbi_smal_cap_my8974. This scheme, offered by SBI Mutual Fund, is one of the top-performing small-cap equity mutual funds in India.
What is SBI Small Cap Fund?
The SBI Small Cap Fund is an open-ended equity mutual fund scheme that primarily invests in small-cap companies. It was launched on September 9, 2009, and has since built a solid reputation for wealth creation.
Small-cap companies are firms that rank beyond the top 250 companies in terms of market capitalization. Mutf_in: Sbi_Smal_Cap_My8974 These businesses are relatively small but have the potential to grow exponentially. This is what the SBI Small Cap Fund aims to capitalize on.
This scheme is categorized under high-risk, high-return equity investments — a suitable option for long-term investors with a higher risk appetite.
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Fund Snapshot
| Parameter | Details |
|---|---|
| Fund Name | SBI Small Cap Fund |
| Fund Code (Tracking) | mutf_in: sbi_smal_cap_my8974 |
| Fund House | SBI Mutual Fund |
| Launch Date | 9th September 2009 |
| Fund Type | Open-ended Equity Scheme |
| Benchmark Index | S&P BSE 250 Small Cap TRI |
| Risk Level | Very High |
| Minimum Investment | ₹5,000 (Lump Sum), ₹500 (SIP) |
| Expense Ratio (Regular) | ~1.61% |
| AUM (Assets Under Mgmt) | ₹20,000+ Cr (Approximate as of 2025) |
Investment Objective
The SBI Small Cap Fund aims to generate long-term capital appreciation by investing predominantly in a diversified basket of equity stocks of small-cap companies. The focus is on identifying undervalued or high-growth potential businesses that are currently at an early stage of development.
Fund Manager Strategy
The fund is currently managed by Mr. R. Srinivasan, a seasoned fund manager known for his consistent investment style and stock-picking ability.
The strategy involves:
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Bottom-up stock picking with a focus on company fundamentals.
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Diversified exposure across multiple sectors to reduce concentrated risk.
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Investment in growth-oriented businesses with strong management and scalable business models.
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Low portfolio churn, ensuring long-term value creation.
Performance Analysis
The SBI Small Cap Fund has consistently outperformed its benchmark and peers across different time frames.
| Time Period | Fund Return | Benchmark Return |
|---|---|---|
| 1 Year | ~24% | ~21% |
| 3 Years (CAGR) | ~14.5% | ~11% |
| 5 Years (CAGR) | ~24.8% | ~17% |
| Since Inception | ~19% CAGR | N/A |
Note: Returns are approximate and subject to change. Always check the latest NAV and performance data on the AMC website or financial portals.
Portfolio Composition
The SBI Small Cap Fund maintains a well-diversified portfolio, investing across small and mid-cap stocks and occasionally holding cash for tactical allocation.
Top Sectors (as of 2025)
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Consumer Goods
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Capital Goods
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Healthcare
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Financial Services
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Chemicals
Top Holdings
While the specific holdings change periodically, the fund usually invests in companies with scalable operations, strong governance, and innovative products or services.
Allocation
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Small Cap Stocks – Approx. 80%
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Mid Cap Stocks – Around 10%
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Cash or Debt – 5-10% (for liquidity or market timing)
Risk Factors
Being a small-cap equity fund, the investment involves very high risk, including:
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Market Volatility: Small caps are sensitive to economic changes and market sentiment.
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Liquidity Risk: It can be harder to sell certain small-cap stocks during market downturns.
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Business Risk: Smaller companies might be more vulnerable to financial instability.
That said, long-term investors who can tolerate short-term fluctuations may benefit from potential capital appreciation.
Who Should Invest?
The SBI Small Cap Fund (mutf_in: sbi_smal_cap_my8974) is ideal for:
✅ Long-term investors (5+ years horizon)
✅ Individuals with high-risk appetite
✅ Young investors aiming for wealth accumulation
✅ Those who want to diversify their equity portfolio
Avoid this fund if:
❌ You have a short investment horizon
❌ You are risk-averse
❌ You seek consistent short-term income
How to Invest in SBI Small Cap Fund
You can invest in the SBI Small Cap Fund through:
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SBI Mutual Fund Website
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Online platforms like Groww, Zerodha, Paytm Money, or Kuvera
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Banks and registered distributors
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Through a SIP or lump sum investment
Always ensure KYC compliance before initiating mutual fund investments.
SIP vs Lump Sum Investment
| Parameter | SIP | Lump Sum |
|---|---|---|
| Minimum Amount | ₹500/month | ₹5,000 |
| Volatility Impact | Lower due to cost averaging | Higher impact of market timing |
| Suitable For | Salaried, disciplined investors | Investors with surplus capital |
| Risk Level | Moderately lower due to averaging | Higher risk from market fluctuations |
Taxation Rules
Just like other equity mutual funds, SBI Small Cap Fund is taxed as follows:
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Short-Term Capital Gains (STCG): 15% (if redeemed within 1 year)
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Long-Term Capital Gains (LTCG): 10% for gains above ₹1 lakh per year
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Dividends: Taxed as per income slab of investor. TDS of 10% if over ₹5,000 annually
Why SBI Small Cap Fund Stands Out
✔️ Strong Track Record: Delivered consistent returns over a decade
✔️ Experienced Management: Managed by industry veteran
✔️ Diversified Approach: Minimizes risk through sectoral and stock diversification
✔️ Wealth Creation Potential: Ideal for long-term wealth building
While there are several small-cap funds in the market, the SBI Small Cap Fund has built investor trust through its performance consistency and strategic asset management.
Things to Keep in Mind Before Investing
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Small-cap funds can be volatile. Be ready for ups and downs.
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Don’t check NAV daily; focus on long-term performance.
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Invest via SIP for disciplined and cost-averaged exposure.
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Rebalance your portfolio periodically with the help of a financial advisor.
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Consider exit load and lock-in (if applicable) before redeeming units.
Conclusion
The SBI Small Cap Fund (mutf_in: sbi_smal_cap_my8974) offers a valuable opportunity for investors aiming to benefit from the dynamic growth of India’s smaller companies. With an experienced fund manager, strong historical returns, and a prudent investment philosophy, this fund stands out in the small-cap mutual fund space.
That said, it is crucial to match the fund’s risk profile with your investment goals. If you are comfortable with market volatility and are looking for high-growth options over the long term, this fund could be a strategic part of your portfolio.
3 Most Asked FAQs
1. What is the minimum amount required to invest in SBI Small Cap Fund?
You can start investing with ₹5,000 as a lump sum or ₹500 per month via SIP.
2. Is SBI Small Cap Fund suitable for short-term investment?
No. This fund is ideal for a long-term horizon (minimum 5 years) due to its high volatility.
3. How many times should I check my investment in SBI Small Cap Fund?
Quarterly reviews are sufficient for long-term investors. Avoid checking NAV daily.
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