Exposure to small-cap funds should not exceed 20% of total investment portfolio

Q. What’s a small-cap fund? Ought to I begin investing in it via SIPs? Are you able to please counsel a number of names?

Kumar Dev

Solutions by Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital:

Chances are you’ll begin investing within the small-cap funds via systematic funding plan (SIP), supplied you’ve working mutual fund SIPs in large-cap and mid-cap fund schemes. Additionally, notice that your complete publicity in small-cap funds shouldn’t be greater than 20% of your complete portfolio.

There are greater than 7,000 listed corporations in our nation. The highest 100 are counted as large-cap corporations, the following 150 are categorised as mid-cap corporations and the remaining are clubbed as small-cap corporations. Small-cap funds spend money on fastidiously chosen corporations of the complete listing of over 6,000 corporations, excluding the highest 250.

Common returns for small-cap class since inception has been round 18% every year. However please notice that previous returns are not any indication of future returns.

The highest three small-cap fund schemes by way of measurement of funds being managed are Nippon India Small Cap Fund, HDFC Small Cap Fund, and SBI Small Cap Fund.

Additionally, notice that the big measurement of any fund scheme doesn’t essentially imply that it is suggested for funding.

Q. I’ve invested 5 lakh in Floating Charge Saving Bonds. I need to know whether or not I’m allowed to withdraw the quantity earlier than the seven-year lock in. If sure, what are the foundations?


Funding in Floating Charge Saving Bonds is finished for a interval of seven years. Nonetheless, if you wish to encash your bonds earlier than maturity, the foundations are fairly stringent:

Be aware that for the primary 4 years nobody is allowed to take a pre-mature withdrawal.

Within the fifth 12 months of funding, you possibly can request for pre-mature withdrawal, supplied you might be 80 and above. Full funding shall be refunded with none penalty on the principal quantity.

Equally, within the the sixth 12 months, you’ll be allowed to make a pre-mature refund, in case your age is 70 years and above.

And within the seventh 12 months of funding i.e., after the expiry of 6 years from the unique date of funding, it’s possible you’ll take again your cash supplied your age is 60 years or above.

As already talked about, there isn’t any penalty from on the principal quantity in case of pre-mature withdrawal. Nonetheless, curiosity cost is diminished to 50% for the final six months interval, earlier than the date of withdrawal.

Additionally, notice that these bonds are non-transferable and usually are not traded on any inventory alternate.

(Please ship queries and views at mintmoney@livemint.com)

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