Microcap and Small cap funds - Option to invest in microcap and small cap stocks by Non experts

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by kharb, Jan 1, 2016.

  1. kharb

    kharb Well-Known Member

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    There is lot of history and research available of bigger mid caps, large cap and mega cap compnies.They are well researched stocks and even non experts like me can start investing in those for steady returns.But microcap and small cap stocks are relatively unknown and less researched stocks.Investing in them is game of experts and non experts like me can burn their fingures if invest just to show bravery without proper research and analysis .For non experts like me who wish to invest and benefit from faster growth in micro cap and small cap compnies ,microcap and small cap funds are also a good option.Six of these funds ,DSP microcap,Reliance small cap,Sunderm smile ,Mirae emerging blue chip ,uti mid cap and Franklin smaller Compnies funds have more than doubled money in last two years .Returns were between 107 %to 143% .Luckily as mentioned in my many posts, I am an invester in DSP microcap,Relince small cap,Mirae emerging blue chip and Franklin smaller Compnies fund.Although I do have small portion of my 30% portfolio meant for such compnies also invested in stocks directly ,but bigger part of that 30% is invested in these funds.I am happy with returns and thanks Indian mutual fund managers for providing good option,although past performance is not guaranty for future.Please note this post is just for discussion and in no way recommendation to invest in these funds. .More over there are many more other good funds ,other options available in market and I have nothing for or against any or discussed funds as option.
     
    Last edited: Jan 1, 2016
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  2. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Kharb sir Happy New Year to you with lot of prosperity and happiness in new year.

    Congrats on sooper returns of 107 to 143%. Sir I want to ask why you have so many funds when all funds will be investing in same space and same stocks. Portfolio of all funds will be mostly same. So where is diversification? Also, there is trouble of managing so many funds, dividend tracking, NAV tracking, SIP tracking etc so is it not better to have only one fund for better tracking and focus.

    I agree that investing in top quality micro caps is very good idea. I have stock in Vidhi Dyestuffs (mcap < 300 cr) which is doing well. It has good management with track record.
     
  3. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Sir I have brainwave. What we can do is to track top 10 holdings of all top funds. Mostly they will be common stocks. These stocks can be treated safe because of research by so many funds into them. We can directly invest in such stocks with max exposure of 3% to each. :)
     
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  4. kharb

    kharb Well-Known Member

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    I had already started a thread on common top holding of small cap funds some time back for discussion to search winners out of them ,but due to time constraints I could not post further ,but look forward to mention stocks.More over I regularly study picks of these funds and if any stock attract me ,I also directly invest additionally in that stock .Yes I keep many funds and stocks,but when ever I need money,I kick out the non performer ,it may be fund or stock.This is my cleaning process.I stay invested in any stock or fund till stock outperform NIFTY or Mutual fund its bench mark in three and five year time..Rest are stuff to be kicked.
     
    Last edited: Jan 1, 2016
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