You may be a novice in the mutual fund market, but still, everyone understands the necessity of having an investment. While some mutual funds have low to moderate risk, there are multiple options available that are high risk but also high return.
If you want to earn a significant amount in a short but consistent period, high yield small cap mutual funds are what you should target. One of these is the Nippon mutual fund.
Nippon India Small Cap Fund
The scheme aims to create long-term capital appreciation by investing money in equity and equity-related security instruments of small-cap companies. The Nippon India Small Cap fund has a significant Net Asset value
While the SEBI Riskometer has marked this as a high-risk investment, it is of average risk grade. This open-ended mutual fund has provided high returns since it was started.
Small Cap funds
Not all companies have highly-ranked stocks on the market. Many are ranked 251 and below. These belong to up and coming companies and carry the potential to have significant returns.
Small cap funds are ideal for people who have a high-risk tolerance. To make the most out of these, it is ideal to maintain the investment for 8 – 10 years. While they have the potential to outperform their prediction, they are still fairly risky.
Being a well-established organization, Nippon India’s small cap fund fund is a sound investment with high potential returns.
Why Mutual funds?
To make investing easier and fetch higher returns, investors should go for mutual funds. These are handled by experts who are adept at growing your profile and ensuring higher returns.
Additionally, investing your money has the following benefits:
- Easy diversification of risks and portfolio
- Offers a range of investment types
- Debt assets
- Equity assets
- Hybrid funds
- Shares
- Fixed income tools
- Open-ended mutual funds are highly liquid
- Tax benefits
- Small initial investment
- Flexibility in terms of SIPs and lumpsum investments
- Cost effective as compared to stocks
- Low cost of transaction
- Well regulated by SEBI
For small investors, SIP is an attractive option. Using an SIP calculator online, you can get an estimate for your investment.
How to invest?
Investing your money in mutual funds can be done in a few simple steps:
- Risk profiling: understand how much financial risk you can tolerate.
- Asset allocation: this involves dividing your money among different asset classes
- Identify the type of funds that you want in your portfolio
- Decide on the mutual fund scheme
- Diversify your investments
You may create an account with an asset management company website or use an app. They both offer an interactive user-friendly interface, evaluation tools, and expert advice.
With the Nippon Mutual Fund, you can ensure that your investment yields a good return.
Keep the following things in mind when investing:
- Have some particular goals in mind before investing; they will help determine your timeline
- Select the right kind of investment fund
- Consider the risks involved
- Keep your updated KYC on hand
Using an SIP calculator
This is an online tool that is generally used to calculate expected returns for investments. As someone interested in mutual funds, you can use an SIP calculator online to determine if the company or mutual fund you are looking into is viable for an investment or not.
Use an SIP calculator online to
- Make informed financial decisions
- Plan investments and set long term financial goals
- Save time when calculating the returns
- Pick safer investment options
- Manage risk
- Check the potential of different investment amounts and routes
With an SIP calculator, an investor can determine the amount and duration of each investment to receive the returns that you are targeting.
Why go for Nippon mutual fund?
Considering the market average, the returns from the Nippon mutual fund are significantly high. Although a high-risk investment, had you invested 10000 rupees 10 years back, you would have had 1,03,860 rupees today.
In contrast, had the investment been in the Nifty small cap 250 TRI, you would have had Rs 40000 – 60000. While the return might not indicate the consistency of the investment, it does not negate the fact that it is significantly higher than others of its kind.
To elaborate, the Nippon India small cap fund has the following advantages according to financial experts:
- High rolling returns of the fund with 22.13% annualised return
- Trailing returns at 26.37% which is fairly high
- Significant periodical returns
While it cannot be denied that in some quarters, the fund has had negative returns, it has outperformed others of its kind by miles.
To Conclude
If you are seeking high returns over a period of time, the Nippon mutual fund might just be the right investment. To be the person who goes for high risk investments, make sure that you are sound in your financial capabilities.
Understand your risk-taking capacity. Use an SIP calculator online to evaluate if an investment is right for you. Always keep in mind the cautionary advice given by SEBI and make calculated investments.
