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Can I invest in SBI Small Cap Fund?

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ET Online|
Dec 11, 2019, 01.58 PM IST
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I am planning to invest in a small cap fund (Rs 3,000 via SIP). Could you please provide a review of SBI Small Cap Fund? If it is not advisable to enter SBI Small Cap Fund at this point of time, please suggest a good small cap fund to invest.
--Prosanta


You have not mentioned your financial goal, investment horizon, or risk profile. So, it is not clear why you want to invest in a small cap scheme. If you are planning to invest in small cap schemes because of their potential to offer superior returns, you should consider the following points before proceeding further.

One, small cap schemes are extremely risky and volatile. That is why these schemes are recommended to investors with a very-high risk appetite and ability to withstand volatility. These schemes may offer you very high returns during the bull phase, and they tend to fall sharply during the bad phases in the market. You should invest in small cap schemes only if you can continue with your investments during the painful phases.

SBI Small Cap Fund is a good performer in the category. Here are our recommended small cap schemes: Best small cap mutual funds to invest in 2019
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