LIC MF Small Cap Fund is an open-ended equity mutual fund managed by LIC Mutual Fund Asset Management Limited. Launched on June 21, 2017, the scheme aims to provide investors with opportunities for long-term capital appreciation by predominantly investing in equity and equity-related instruments of small-cap companies. However, there is no assurance that the investment objective will be realized.
Fund Managers:
- Mr. Yogesh Patil – Managing since July 31, 2023.
- Mr. Dikshit Mittal – Managing since July 31, 2023.
LIC MF Small Cap Fund Share Price
As of March 31, 2025, the Net Asset Value (NAV) of the LIC MF Small Cap Fund is as follows:
- Direct Plan – Growth Option: ₹30.87
The NAV represents the per-unit market value of the fund’s assets and is updated daily based on the closing market prices of the underlying securities.
Asset Allocation:
- Equity & Equity-related instruments of Small Cap Companies: 65% to 100% (High risk)
- Equity & Equity-related instruments of Companies other than Small Cap Companies: 0% to 35% (High risk)
- Debt and Money Market instruments and Tri-party Repo: 0% to 35% (Low to Medium risk)
- Units issued by Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs): 0% to 10% (Medium to High risk)
Minimum Investment Amounts:
1) Initial Purchase (Other than SIP): ₹5,000 and in multiples of ₹1 thereafter.
2) SIP (Systematic Investment Plan):
- Daily: ₹100 and in multiples of ₹1 thereafter.
- Monthly: ₹200 and in multiples of ₹1 thereafter.
- Quarterly: ₹1,000 and in multiples of ₹1 thereafter.
3) Additional Investment: ₹1,000 and in multiples of ₹1 thereafter.
4) Redemption: ₹1,000 and in multiples of ₹1 thereafter.
Load Structure:
1) Entry Load: Not applicable.
2) Exit Load:
- Nil if up to 12% of units are redeemed or switched out within 12 months from the date of allotment.
- 1% of the applicable NAV if units exceeding the 12% limit are redeemed or switched out within 12 months from the date of allotment.
- Nil if units are redeemed or switched out after 12 months from the date of allotment.
Investment Strategy:
The fund constructs a diversified portfolio primarily comprising small-cap companies, employing a combination of top-down and bottom-up approaches.
The investment philosophy focuses on growth at reasonable prices by evaluating companies across fundamental parameters such as competitive position, earnings growth, management quality, promoter track record, future plans, valuation, corporate governance, and sustainable cash flows.
Who Should Invest?
- Long-term investors with an investment horizon of at least 5 years.
- Investors seeking wealth creation over the long term.
- They have a moderately high-risk appetite and are looking for aggressive portfolio allocation.
- Investors who prefer exposure to small-cap companies as part of their asset allocation.
- They capable of withstanding short-term market volatility and willing to invest patiently.
Plans and Options Available:
1) Plans: Regular Plan and Direct Plan (both share a common portfolio).
2) Options: Growth Option and Income Distribution Capital Withdrawal Option.
- IDCW Option offers Reinvestment of IDCW and Payout of IDCW facilities.
- Default Investment Option is Growth Option.
- For IDCW Option, the default facility is Reinvestment of IDCW.
Performance and Portfolio Details:
As of February 2025, the fund holds 67 stocks, with the top 5 company holdings accounting for 14.93% of the assets. The top 3 sector holdings constitute 43.24% of the assets, with Capital Goods being the sector with the highest exposure at 21.01%.
Expense Ratio:
The fund has a lower expense ratio of 0.97%, which is inclusive of GST.
Tax Implications:
- Short-term Capital Gains (STCG): Taxed at 15% if units are redeemed within 1 year of investment.
- Long-term Capital Gains (LTCG): Gains exceeding ₹1 lakh are taxed at 10% if units are redeemed after 1 year.
- Dividend Income: Added to the investor’s income and taxed as per the applicable tax slab.
LIC MF Small Cap Fund Review
LIC MF Small Cap Fund is an open-ended equity mutual fund managed by LIC Mutual Fund Asset Management Limited, aiming to provide long-term capital appreciation by predominantly investing in equity and equity-related instruments of small-cap companies.
Performance Overview:
Returns:
As of March 31, 2025, the Direct Plan – Growth option of the fund has delivered the following trailing returns:
- 1-year: 12.89%
- 3-year: 17.66%
- 5-year: 35.1%
- Since inception: 15.61%
Expense Ratio: The expense ratio for the Direct Plan is 0.97% as of March 3, 2025.
Assets Under Management (AUM): The fund manages assets worth ₹433.6 crore as of February 28, 2025.
Risk and Suitability:
Investing in small-cap funds entails higher volatility and risk due to the nature of small-cap companies. These funds can experience significant fluctuations during market downturns.
Therefore, they are suitable for investors with a high-risk tolerance and a long-term investment horizon of at least 5-7 years. Systematic Investment Plans (SIPs) are recommended to mitigate short-term market volatility.
Conclusion:
LIC MF Small Cap Fund has demonstrated competitive performance within its category, offering substantial returns over the long term. However, potential investors should be prepared for higher volatility associated with small-cap investments and consider their risk appetite and investment horizon before committing.
LIC MF Small Cap Fund Portfolio
As of February 28, 2025, the LIC MF Small Cap Fund maintains a diversified portfolio with a significant emphasis on small-cap equities.
Asset Allocation:
- Equity Holdings: 96.84%
- Mid Cap Stocks: 8.81%
- Small Cap Stocks: 38.57%
- Cash & Cash Equivalents: 3.16%
Top Holdings:
| Company | Sector | Percentage of Portfolio |
| JTL Industries Ltd | Metals & Mining | 3.78% |
| Housing & Urban Development Corporation Ltd | Financial | 2.86% |
| International Gemmological Institute (India) Ltd | Consumer Discretionary | 2.85% |
| Sanathan Textiles Ltd | Textiles | 2.78% |
| Concord Enviro Systems Ltd | Others | 2.66% |
Sector Allocation:
| Sector | Percentage of Portfolio |
| Industrial Machinery | 14.34% |
| Textiles | 7.61% |
| Electrical Components & Equipment | 5.96% |
| Iron & Steel | 5.18% |
| Others | 7.67% |
Portfolio Characteristics:
- Number of Stocks: 67
- Top 5 Stock Holdings Weight: 14.93%
- 10-Stock Holdings Weight: 26.29%
- Top 3 Sector Holdings Weight: 17.48%
This composition reflects the fund’s strategy to achieve long-term capital appreciation by investing predominantly in small-cap companies across diverse sectors.
LIC MF Small Cap Fund Returns
As of March 31, 2025, the LIC MF Small Cap Fund has demonstrated the following performance:
Point-to-Point Returns:
| Investment Period | Absolute Returns | Annualized Returns |
| 1 Year | 11.60% | 11.60% |
| 2 Years | 58.85% | 26.00% |
| 3 Years | 57.94% | 16.44% |
| 5 Years | 327.52% | 33.70% |
| Since Inception | 177.03% | 13.99% |
Systematic Investment Plan (SIP) Returns:
| Investment Period | Total Investment | Latest Value | Absolute Returns | Annualized Returns |
| 1 Year | 12,000 | 10,936.94 | -8.86% | -16.00% |
| 2 Years | 24,000 | 26,430.50 | 10.13% | 9.57% |
| 3 Years | 36,000 | 45,135.59 | 25.38% | 15.24% |
| 5 Years | 60,000 | 105,250.10 | 75.42% | 22.65% |
Trailing Returns:
| Investment Period | Fund Returns | Category Average |
| 1 Year | 11.62% | 6.61% |
| 3 Years | 16.50% | 16.85% |
| 5 Years | 33.77% | 35.30% |
| Since Launch | 14.01% | – |
These figures illustrate the fund’s performance over various timeframes, highlighting its potential for long-term capital appreciation, particularly in the 5-year period.
However, it’s important to note that SIP returns can vary, with shorter-term investments experiencing negative returns, as seen in the 1-year SIP data. Investors should consider their investment horizon and risk tolerance when evaluating this fund.
LIC MF Small Cap Fund Direct Growth
As of April 1, 2025, the LIC MF Small Cap Fund – Direct Growth has demonstrated the following performance:
Trailing Returns:
| Investment Period | Fund Returns | Category Average |
| 1 Year | 12.89% | — |
| 3 Years | 17.36% | 16.89% |
| 5 Years | 23.94% | 24.27% |
| Since Launch | 14.93% | — |
Key Risk & Return Ratios:
| Ratio | Fund Value | Category Average |
| Alpha | 0.57 | 4.97 |
| Sharpe Ratio | 0.57 | 5.82 |
| Beta | 0.91 | 0.68 |
| Standard Deviation | 19.09 | 13.08 |
These details provide an overview of the fund’s performance, costs, and investment requirements, aiding investors in making informed decisions.
Strengths of LIC MF Small Cap Fund
1) High Growth Potential
- The fund has delivered strong long-term returns, particularly in the 5-year period (33.77% CAGR), indicating its ability to generate wealth over time.
2) Diversified Small-Cap Portfolio
- Invests across multiple small-cap sectors, reducing reliance on any single industry and increasing growth opportunities.
3) Experienced Fund Management
- Managed by Nikhil Rungta and Mahesh Bendre, professionals with expertise in small-cap investing.
4) Low Expense Ratio (0.97% for Direct Plan)
- Compared to other small-cap funds, the expense ratio is reasonable, allowing investors to retain more profits.
5) Good Risk-Adjusted Returns
- The Sharpe Ratio (0.57) suggests the fund has managed risk relatively well while generating returns.
6) SIP Option for Long-Term Investment
- Allows small investments starting from ₹200, making it accessible to all types of investors.
Risks of LIC MF Small Cap Fund
1) High Volatility
- Being a small-cap fund, it is more volatile than large or mid-cap funds, especially during market downturns.
2) Liquidity Risk
- Small-cap stocks can have lower trading volumes, making it difficult to exit positions quickly without impacting prices.
3) Short-Term Losses Possible
- The 1-year SIP returns (-8.86%) show that short-term investors may face losses in a volatile market.
4) Underperformance Compared to Peers
- In some timeframes, the fund has underperformed the category average, especially in the 3-year and 5-year trailing return metrics.
5) Economic and Market Dependency
- Small-cap funds are sensitive to economic slowdowns and can be negatively affected by interest rate hikes, inflation, or global financial issues.
6) Exit Load on Early Withdrawals
- 1% exit load applies if more than 12% of the investment is redeemed within 12 months, making it less flexible for short-term investors.
Final Verdict:
LIC MF Small Cap Fund is a high-risk, high-return option, best suited for long-term investors willing to endure market fluctuations. It is ideal for those looking for wealth creation over 5+ years, but not recommended for conservative or short-term investors.
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