Which small-caps must I spend cash on?

I have to spend cash on mutual funds (MFs) through a scientific funding plan (SIP). Please suggest a number of good small-cap funds.

—Anthony Fernandez

Investing by the use of month-to-month SIPs is the best technique to understand your medium and future targets, be it the education and marriages of your kids, 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 counsel 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 must 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 doable you may choose each of the subsequent schemes: Kotak Small Cap Fund or Nippon India Small Cap Fund.

Another important degree to remember is that it is important to have a long-term time horizon of as a minimum seven years or longer.

Rajiv Bajaj is chairman & MD, BajajCapital.

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