HDFC Small Cap Fund: How It Guarantees Higher Growth

Introduction

A key challenge most investors have to face is making great returns from their money. It is hard for them to decide where to invest hard-earned money so it will grow over time. If you are facing the same challenge, then here is a solution for you. The HDFC Small Cap Fund is a way that helps you to double your investment growth.

It is a small category fund by HDFC Mutual Fund that aims to deliver higher growth to investors. The fund started in the year 2008 to solve a major problem - Making Higher Returns. It focuses on investing in small-sized companies that have a higher potential for growth. From the day it started, the HDFC small cap fund NAV has grown over time and currently, it is Rs. 121.96 as of February 2025. Whatever the fund promises, it delivered to investors over the last few years. The reason behind this growth is the great investing strategy and expert fund management.

In this article, you will learn everything about the HDFC small cap scheme. By the end of this guide, you will have a clear understanding of its investing strategy and how the fund can double your returns. Let's get started.

What are Small Cap Funds?

The small cap funds are a popular category that focuses on small cap companies. Understanding small cap funds is important because this is how you can know how HDFC small cap scheme provides massive growth.

The small cap funds focus on investing in small-cap companies. This company's market size is between Rs.1000-5000 crores. Although, small-cap companies have small market sizes they have higher growth potential. Investing in these companies can be rewarding due to their regular expansion. In simple words, small cap companies expanding their size to become large companies. When these companies become large in the future, their stock prices will go high and investors will make more profit.

This is the reason why small cap funds gained so much popularity in mutual funds over time. Even though these funds were considered a bit risky but still delivered higher returns than large and mid cap funds.

What is HDFC Small Cap Fund Investment Strategy?

The growth of a fund highly depends on its investment strategy. If you look at the past performance of the HDFC small cap fund, you will understand how good its strategies are to make higher returns. Here is a clear view of fund effective investing strategies:

1. Focus on Emerging Small Companies

The fund targets small cap companies for investment because of its growth potential. It allocates a large asset percentage to small companies that help to make high returns.

2. Bottom-Up Stock Picking

Instead of focusing on market trends, the fund analyses every company individually. This helps to identify growth-oriented companies that can make higher profits.

3. Diversification into Sectors

One of the effective strategies that helps to maintain growth is diversification. The HDFC small cap fund portfolio spreads into different sectors that help to reduce the risk and maintain performance.

4. Long-Term Growth Approach

The fund focuses on holding the money in small companies for the long term. It helps the fund to turn short-term losses into higher growth potential in the long term.

This investment strategy is the reason why the fund is making consistent growth. If you look at the HDFC small cap fund NAV, you will understand how effective the fund strategies are to make higher returns.

Who is the Fund Manager of HDFC Small Cap Fund?

The HDFC small cap scheme is managed by Mr Chirag Setalvad. He comes with 24 years of valuable experience in fund management and equity research. Currently, he holds the position of senior fund manager at HDFC Mutual Fund.

Over the past few years, he has become an important name in the mutual funds market. He uses proven strategies of investing to achieve higher capital gains. He picks profitable stocks based on strong market research and company performance. Not only right stock selection but he also focuses on diversifying HDFC small cap fund portfolio into different sectors.

This strategy of investment shows why it holds a respected name in the market. As an investor, if you want to invest your money where it grows over time and you feel safe, then Chirag's expertise will definitely impress you.

How to Start SIP in HDFC Small Cap Fund?

Starting a systematic investment plan known as SIP is a simple process. You can easily do it online by following these simple steps:

• Step 1: Start by visiting the website of HDFC Mutual Fund using your desktop or phone.
• Step 2: It will ask you to create your investment account to begin investment in HDFC schemes.
• Step 3: Now you have to complete your KYC (Know Your Customer). You can simply do it by uploading details like PAN, Adhaar, and Driving Licence.
• Step 4: After completing the KYC, you have to choose the investment scheme. Simply choose the small cap fund for the investment.
• Step 5: Next, you have to select the SIP investment plan. You can also choose Lumpsum if you prefer a large sum investment at once.
• Step 6: Last step is to complete the payment via UPI or Netbanking and your investment is ready to make returns for you.

You see, how easy is to start a systematic investment plan in HDFC small cap without taking any stress.

Why is HDFC Small Cap Fund a Good Investment for High Returns?

If you are looking to build a strong wealth empire over time, then investing in HDFC small cap fund is a smart choice. It is considered a value investing choice because of these reasons:

• Strong Track Record

The fund comes with a strong past performance that shows how much growth it gave to investors. It provided 24% of returns in the last 5 years that shows by investing in the fund, you can also become part of this exponential growth.

• High Growth Potential

As you know, the fund primarily invests in emerging small companies that are expanding to become large companies. When these companies become large, it will give you a boost to your investment that you never experienced.

• Long-Term Wealth Creation

If you are an investor who wants to feel relaxed by making a strong investment for 5-7 years, then the fund is a great choice. It will help you to make higher profits that build you a great financial future.

Conclusion

In short, the HDFC small cap fund is a value investing choice for you to make higher returns from investment. You understood how effective the fund investment strategy which makes it stand out. However, it has to face higher volatility because of focusing on small companies but it is also important for you to consider that fund also provided a strong performance over time.

One of the biggest advantages of investing in the fund is SIP investment. You can easily start your investment by investing a fixed amount at set times. So if you are looking to grow your money over time without putting your all savings, then this opportunity is made for you.