Fincash » Franklin India Smaller Companies Vs HDFC Small Cap Fund
Table of Contents
Franklin India Smaller Companies Fund and HDFC Equity Fund both belong to the small-cap category of equity fund. These schemes invest their corpus in shares of companies having a Market capitalization of less than INR 500 Crores. Small-cap companies are either start-ups or are in their early stages of development. These schemes form the bottom of the pyramid when Equity Funds are compared on the Basis of market capitalization. In many situations, small-cap schemes have performed better as compared to others. Though Franklin India Smaller Companies Fund and HDFC Small Cap Fund belong to the same category of Small cap funds, yet they differ on account of numerous parameters such as performance, NAV, AUM, and so on. So, let’s understand the differences between both the schemes through this article.
Franklin India Smaller Companies Fund is managed and offered by Franklin Templeton Mutual Fund under the small-cap category. This scheme was launched in the month of January 2006. Franklin India Smaller Companies Fund uses Nifty Free Float Midcap 100 Index and Nifty 50 Index as its benchmark to construct the Portfolio. As on March 31, 2018, some of the top 10 holdings of Franklin India Smaller Companies Fund’s portfolio consisted of HDFC Bank Limited, Finolex Cables Limited, Voltas Limited, and Cyient Limited. The scheme is managed by Mr. Janakiraman, Mr. Hari Shyamsunder, and Mr. Shrikesh Nair. Franklin India Smaller Companies Fund is suitable for individuals seeking for long-term Capital growth generated from a fund that primarily invests in small and mid-cap companies.
HDFC Small Cap Fund is an open-ended small-cap scheme offered by HDFC Mutual Fund. This scheme was launched on April 3, 2008, and its objective is to achieve capital growth in the long-term by Investing mostly in small-cap and mid-cap companies. NIFTY Smallcap 100 Index is the primary benchmark and NIFTY 50 Index is the additional benchmark used by HDFC Small Cap Fund to construct its portfolio. Mr. Chirag Setalvad and Mr. Rakesh Vyas jointly manage the performance of HDFC Small Cap Fund. As on March 31, 2018, some of the top constituents of HDFC Small Cap Fund include Sonata Software Limited, SKF India Limited, Tata Metaliks Limited, and Aurobindo Pharma Limited. As per the Asset Allocation composition, the HDFC Small Cap Fund invests around 80-100% of its fund money in shares of small cap companies and the remaining in mid-cap companies.
There are numerous differences between Franklin India Smaller Companies Fund and HDFC Small Cap Fund on account of various parameters. So, let us understand the differences between these schemes that are categorized in the following sections.
Being the first section, it compares elements such as current NAV, Fincash Rating, and scheme category. With respect to Fincash Rating, it can be said that both the schemes are rated as 4-Star schemes. The comparison of current NAV reveals that there is a difference between the NAV of both the schemes. The NAV of Franklin India Smaller Companies Fund was approximately INR 47 while of HDFC Small Cap Fund was around INR 61, as of April 24, 2018. Even the comparison of scheme category shows that both the schemes belong to the same category, that is, Equity Mid & Small-Cap. The table given below shows the comparison summary of the basics section.
Parameters Basics NAV Net Assets (Cr) Launch Date Rating Category Sub Cat. Category Rank Risk Expense Ratio Sharpe Ratio Information Ratio Alpha Ratio Benchmark Exit Load Franklin India Smaller Companies Fund
Growth
Fund Details ₹179.314 ↑ 1.77 (1.00 %) ₹14,460 on 30 Sep 24 13 Jan 06 ☆☆☆☆ Equity Small Cap 11 Moderately High 1.78 2.18 0.24 3.81 Not Available 0-1 Years (1%),1 Years and above(NIL) HDFC Small Cap Fund
Growth
Fund Details ₹139.715 ↑ 2.37 (1.72 %) ₹33,963 on 30 Sep 24 3 Apr 08 ☆☆☆☆ Equity Small Cap 9 Moderately High 1.64 1.73 0 0 Not Available 0-1 Years (1%),1 Years and above(NIL)
It is the second section in the comparison which analyses the difference in the Compounded Annual Growth Rate or CAGR returns of both the scheme. These CAGR returns are compared at different time intervals such as 6 Month Return, 3 Year Return, 5 Year Return, and Return Since Inception. The comparison of the performance section reveals that in certain instances, HDFC Small Cap Fund leads the race while in others Franklin India Smaller Companies Fund leads the race. The summary comparison of the performance is as shown in the table given below.
Parameters Performance 1 Month 3 Month 6 Month 1 Year 3 Year 5 Year Since launch Franklin India Smaller Companies Fund
Growth
Fund Details -3.7% -3.8% 11.3% 43.1% 26.1% 29.3% 16.6% HDFC Small Cap Fund
Growth
Fund Details -1.5% 0.3% 10.9% 36.1% 24% 28.7% 17.2%
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Being the third section in the comparison, it analyzes the difference in the absolute returns generated by both the schemes for a particular year. In yearly performance section too, the comparison reveals that for certain years HDFC Small Cap Fund has performed better while for other Franklin India Smaller Companies Fund has done better. The table given below summarizes the comparison of yearly performance section.
Parameters Yearly Performance 2023 2022 2021 2020 2019 Franklin India Smaller Companies Fund
Growth
Fund Details 52.1% 3.6% 56.4% 18.7% -5% HDFC Small Cap Fund
Growth
Fund Details 44.8% 4.6% 64.9% 20.2% -9.5%
It is the last section in the comparison that includes elements such as AUM, minimum SIP and lumpsum investment, and others. With respect to minimum SIP and lumpsum investment, it can be said that both the schemes have the same amount. The minimum SIP amount for both the schemes is INR 500 and minimum lumpsum investment is INR 5,000. However, the comparison of AUM shows there is a drastic difference between the AUMs of the schemes. As on March 31, 2018, the AUM of HDFC Small Cap Fund is approximately INR 2,968 Crores while of Franklin India Smaller Companies Fund is approximately INR 7,007 Crores. The comparison summary of this section is tabulated as follows.
Parameters Other Details Min SIP Investment Min Investment Fund Manager Franklin India Smaller Companies Fund
Growth
Fund Details ₹500 ₹5,000 R. Janakiraman - 13.67 Yr. HDFC Small Cap Fund
Growth
Fund Details ₹300 ₹5,000 Chirag Setalvad - 10.27 Yr.
Franklin India Smaller Companies Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Oct 19 ₹10,000 31 Oct 20 ₹9,661 31 Oct 21 ₹18,023 31 Oct 22 ₹19,148 31 Oct 23 ₹25,237 31 Oct 24 ₹36,103 HDFC Small Cap Fund
Growth
Fund Details Growth of 10,000 investment over the years.
Date Value 31 Oct 19 ₹10,000 31 Oct 20 ₹9,536 31 Oct 21 ₹18,508 31 Oct 22 ₹19,506 31 Oct 23 ₹25,963 31 Oct 24 ₹35,327
Franklin India Smaller Companies Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 2.51% Equity 97.35% Equity Sector Allocation
Sector Value Industrials 27.15% Financial Services 17.06% Consumer Cyclical 14.99% Health Care 8.57% Basic Materials 8.4% Real Estate 5.51% Technology 5.45% Consumer Defensive 4.88% Utility 2.83% Energy 0.93% Communication Services 0.29% Top Securities Holdings / Portfolio
Name Holding Value Quantity Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | 5329294% ₹548 Cr 3,868,691 Kalyan Jewellers India Ltd (Consumer Cyclical)
Equity, Since 31 May 22 | KALYANKJIL4% ₹509 Cr 6,963,469 Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Jan 16 | DEEPAKNTR3% ₹403 Cr 1,387,967 Equitas Small Finance Bank Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Oct 20 | EQUITASBNK3% ₹371 Cr 48,064,081 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 31 Jul 23 | ASTERDM2% ₹352 Cr 8,473,781 Blue Star Ltd (Industrials)
Equity, Since 31 Jan 15 | BLUESTARCO2% ₹331 Cr 1,605,632 Karur Vysya Bank Ltd (Financial Services)
Equity, Since 31 Oct 12 | 5900032% ₹330 Cr 15,398,917 Crompton Greaves Consumer Electricals Ltd (Consumer Cyclical)
Equity, Since 31 Jan 24 | CROMPTON2% ₹287 Cr 6,900,000 J.B. Chemicals & Pharmaceuticals Ltd (Healthcare)
Equity, Since 30 Jun 14 | JBCHEPHARM2% ₹272 Cr 1,448,723 Amara Raja Energy & Mobility Ltd (Industrials)
Equity, Since 31 Dec 23 | 5000082% ₹259 Cr 1,819,819 HDFC Small Cap Fund
Growth
Fund Details Asset Allocation
Asset Class Value Cash 6.73% Equity 93.27% Equity Sector Allocation
Sector Value Industrials 27.67% Consumer Cyclical 19.25% Technology 13.44% Health Care 10.7% Financial Services 9.46% Basic Materials 7.06% Communication Services 2.95% Consumer Defensive 2.23% Utility 0.44% Top Securities Holdings / Portfolio
Name Holding Value Quantity Firstsource Solutions Ltd (Technology)
Equity, Since 31 Mar 18 | FSL5% ₹1,850 Cr 59,458,555
↓ -200,394 eClerx Services Ltd (Technology)
Equity, Since 31 Mar 18 | ECLERX3% ₹1,119 Cr 3,718,907
↑ 40,014 Bank of Baroda (Financial Services)
Equity, Since 31 Mar 19 | 5321343% ₹1,061 Cr 42,828,792 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 30 Jun 19 | ASTERDM3% ₹972 Cr 23,420,534
↑ 502,692 Sonata Software Ltd (Technology)
Equity, Since 31 Oct 17 | SONATSOFTW3% ₹876 Cr 13,879,889 Eris Lifesciences Ltd Registered Shs (Healthcare)
Equity, Since 31 Jul 23 | ERIS2% ₹803 Cr 6,024,193
↓ -261,233 Power Mech Projects Ltd (Industrials)
Equity, Since 31 Aug 15 | POWERMECH2% ₹789 Cr 1,175,331 Fortis Healthcare Ltd (Healthcare)
Equity, Since 31 Jul 23 | 5328432% ₹766 Cr 12,453,275 PVR INOX Ltd (Communication Services)
Equity, Since 28 Feb 23 | PVRINOX2% ₹682 Cr 4,101,954 Great Eastern Shipping Co Ltd (Industrials)
Equity, Since 31 Jan 15 | GESHIP2% ₹675 Cr 5,622,939
Therefore, from the above pointers, it can be said that there are differences between both the schemes on account of various parameters. As a result, individuals should be careful before investing in any of the schemes. They should understand the modalities of a scheme completely and check whether it is in-line with their objective or not. This will help them to attain their objectives on time and ensure that their investment is safe.
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