Which small-caps should I spend cash on?

I must spend cash on mutual funds (MFs) through a scientific funding plan (SIP). Please advocate a couple of good small-cap funds.

—Anthony Fernandez

Investing by means of month-to-month SIPs is the best method to understand your medium and future targets, be it the education and marriages of your children, retirement plans, and lots of others.

Since you are starting your funding journey in MFs, do phrase that investing in a small-cap fund carries a greater hazard.

We would moreover recommend you to separate your funding amount in 5 SIPs of equal portions. For occasion, in case you might be planning to take a place 10,000 every month, then it’s best to divide this amount in 5 SIPs of two,000 each. Your 5 SIPs should comprise of two large- cap funds, one mid-cap fund, and one flexi-cap fund, whereas the ultimate one could also be in a small- cap fund.

As for small-cap fund, it is potential you will choose each of the following schemes: Kotak Small Cap Fund or Nippon India Small Cap Fund.

Another important stage to keep in mind is that it is important to have a long-term time horizon of in any case seven years or longer.

Rajiv Bajaj is chairman & MD, BajajCapital.

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