Introduction:
The LIC MF Small Cap Fund aims to deliver long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies. Its strategy targets the high-growth potential typical of smaller firms, though with no guarantee that the investment objective will be achieved
Investment Mechanics
- Minimum Application Amount: ₹5,000 with ₹1 increments thereafter.
- SIP Options:
- Daily: From ₹100
- Monthly: From ₹200
- Quarterly: From ₹1,000
All in multiples of Re 1
Charges & Exit Load
- Entry Load: Nil.
- Exit Load:
- Nil if units redeemed/switched up to 12% within 12 months.
- 1% on units beyond that within 12 months.
- Nil after 12 months
Performance & Asset Metrics
Net Asset Value (NAV)
- As of July 25, 2025 (Direct-Growth): ₹34.51 INDmoney.
- Earlier value (Apr 2025): NAV had hovered around ₹28–₹29, reflecting moderate short-term fluctuations
Assets Under Management (AUM) & Risk
- AUM stands at approximately ₹604–605 crore
- Classified as Very High Risk, aligning with typical small-cap fund volatility Tickertape.
Expense Ratio
- Reported at 0.91% by INDmoney—a relatively cost-conscious figure within its category
- Other sources like Tickertape mention “High” cost, though without a precise percentage
Performance vs Benchmark (Nifty Smallcap 250 TRI)
| Period | Fund Return | Benchmark | Category Avg |
|---|---|---|---|
| 1M | +2% | –1.49% | +0.36% |
| 3M | +10.28% | +11.95% | +10.99% |
| 6M | +0.64% | +12.74% | +7.94% |
| 1Y | –2.78% | –1.52% | +1.21% |
| 3Y | +23.41% | +26.42% | +23.73% |
| 5Y | +32.28% | +32.42% | +32.60% |
| INDmoney |
This indicates the fund has persistently underperformed both its benchmark and category averages across multiple horizons.
Relative Ratings
- INDmoney ranks it 17th out of 18 peers, signaling underwhelming risk-adjusted returns.
- Its 3-Year Returns stand at ~22.68% with a beta ~0.91, Sharpe ~0.98, and negative alpha (–2.14)
Portfolio Composition
The fund holds a diversified basket of approximately 69 equity stocks, with notable holdings (as of latest data):
- JTL Industries (~3.35%)
- Sanathan Textiles (~3.10%)
- Alongside names like Manorama Industries, HUDCO, Apollo Micro Systems, Allied Blenders & Distillers, Infosys, and TCS, among others
This broad exposure across sectors like metals, textiles, consumer staples/discretionary, capital goods, financials, and services underscores its small-cap focus.
Strengths & Considerations
Strengths
- Cost-efficient SIP access: Suitable for regular investment.
- No entry load and flexible exit load structure.
- Diversified portfolio: Spreads risk across industries.
Considerations
- Underperformance: Consistent lag behind benchmark and peers may concern long-term investors.
- High volatility: Common with small-cap funds; suitable only for those with strong risk appetite.
- Moderate AUM: While manageable in terms of liquidity, may limit institutional scale benefits.
- Cost evaluation: The expense appears reasonable, though perceptions vary
Investor Perspective & Context
Small-cap funds offer higher growth potential but come with greater volatility, especially during market downturns. Investors should adopt a long horizon (5–7 years or more) to ride out fluctuations
Final Thoughts
The LIC MF Small Cap Fund is a compelling option for investors seeking long-term capital appreciation through small-cap market exposure. It features accessible entry, a reasonable expense ratio, and a diversified portfolio. However, its historical underperformance, high volatility, and modest AUM make it best suited for risk-tolerant investors with a robust long-term outlook.