In this dynamic and ever-changing environment of mutual fund investments, it can become difficult to evaluate the right fund for you.
This week, Groww is launching its Nifty Small Cap 250 Index Fund. Here is a short note as to why it should be on your watchlist:
- With a ten-year compound annual growth rate (CAGR) of 18.90%, the Nifty Small Cap Index has outperformed the Nifty 50, demonstrating the potential of small-cap stocks to deliver significant returns.
- The fund offers diversification across industries that are not usually included in the Nifty 50, such as media & publishing, textiles, media, and forest materials.
- The current valuations of the Nifty Small Cap 250 Index present an attractive proposition, trading at a price-to-earnings (P/E) ratio 19% below its ten-year averages.
- Furthermore, in comparison to actively managed funds in its category, which has a P/E of 42.62. the small-cap index trades at a P/E OF 25.63 as of January 31, 2024.
- Groww utilizes its proprietary high-frequency rebalancing technology called ‘SPEAR’, to closely align the fund with its index, enhancing the potential for returns to closely mirror the benchmark.
- Additionally, given its characteristics, investing in this fund can serve as a strategic step towards financing long-term education goals, as the potential for higher growth could support savings and investment objectives.
In conclusion, this fund is directed towards those investors with a high-risk appetite seeking diversified exposure to small caps in the Indian equity sector.
