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L&T Emerging Business Fund and Other 3 Top Alternate Options

08 June 2022

The L&T Emerging Business Fund is an open-ended equity fund managed by L&T Mutual Fund. The fund was launched on May 12, 2014, and it invests in equity, sectoral, and other related schemes of L&T Mutual Fund.

The scheme aims to seek maximum capital growth through investments in equity with a focus on small and mid-cap companies.

It is one of the most famous small-cap funds in the market. But it has put some restrictions on the fresh investments, on account of the interest of the existing investors.

Being a small-cap fund, this fund is best suited for investors with a high-risk appetite and who have a long investment horizon, say more than 6 years, to get its true reward. 

Key Information To Know About L&T Emerging Business Fund

  • Launch Date: 12 May 2014 
  • Fund Category: Equity – Small Cap Plan Type Direct 
  • AUM (Fund Size): ₹4,286 
  • Riskometer: High 
  • Minimum SIP: ₹500 
  • Minimum SWP: ₹500 
  • Performance: w.r.t its Benchmark has consistently outperformed its benchmark 
  • Expense Ratio: 1.86% 
  • Exit Load: If redeemed between 0 Year to 1 Year; Exit Load is 1%; 
  • Type: Open-ended 
  • Return Since Launch: 19.67%
  • Managed by: Mr. Karan Desai since Feb 2017, Mr. Soumendra Nath Lahiri since Apr 2014

L&T Emerging Business Fund: Investment Objective

The objective of this fund is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities, including equity derivatives, in the Indian markets with the key theme focus being emerging companies i.e., small-cap stocks.

The fund seeks to primarily be a diversified equity fund that will invest predominantly in small-cap stocks to generate long-term capital appreciation. The Scheme could also additionally invest in foreign securities.

However, as with any equity mutual fund, there can be no assurance that the investment objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns.

L&T Emerging Business Fund: Performance

This fund has given high returns over the years and has consistently outperformed its benchmark. It is a fund with high risk and has given a return of 19.67% since its launch. The last one-year return has been 16.32% and the annualized return for the last 3 years has been 20.39%. 

This is one of the most attractive small-cap funds in India right now and has been rated high by almost all rating agencies. Although this fund is new in the small-cap category, it certainly made its mark in the market. The only shortcoming of this fund is that it hasn’t seen really challenging bear markets like the one in 2008 as it made its debut much later.

Best Funds to Invest In Instead of L&T Emerging Businesses Fund

Where to invest instead of L&T Emerging Business Fund Direct? There are some good alternate options in the small-cap category that have shown good performance in recent times.

S.No.

Fund Name

1.

Axis Small Cap Fund Regular-Growth

2.

Quant Small Cap Fund-Growth

3.

Aditya Birla Sun Life Small & Midcap Fund Growth

1) Axis Small Cap Fund Regular-Growth

Axis Small Cap Fund Regular Growth is an Equity Mutual Fund Scheme launched by Axis Mutual Fund. This scheme was made available to investors on 04 Sep 2009. Ashish Naik is the Current Fund Manager of Axis Small Cap Fund Regular Growth fund.

The scheme seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity & equity-related instruments of small-cap companies. 

2) Quant Small Cap Fund-Growth

Quant Small Cap Fund Direct Plan-Growth is an Equity Mutual Fund Scheme launched by Quant Mutual Fund. This scheme was made available to investors on 15 Apr 1996. The scheme seeks to generate capital appreciation by investing in a well-diversified portfolio of small-cap companies.

3) Aditya Birla Sun Life Small & Midcap Fund Growth

Aditya Birla Sun Life Small Cap Fund-Growth is an Equity Mutual Fund Scheme launched by Aditya Birla Sun Life Mutual Fund. This is a Small and Mid Cap Equity Oriented Mutual Fund launched on 01 January 2013. It is a fund with high risk and has given a return of 25.08% since its launch.

The Scheme seeks to generate consistent long-term capital appreciation by investing predominantly in equity and equity-related securities of Small cap companies.

Benefits of Investing In A Businesses Fund

Investing in a Business Fund in India can be very beneficial for your business. These funds are managed by experienced and professional fund managers, who can identify the best investment opportunities.

The main benefits of investing in a Business Fund in India include:

  • Better Returns on Your Investments

Business Funds have been shown to generate better returns than other forms of investment, such as property or shares.

  • Diversification

The fund manager will choose a range of different businesses and industries in order to ensure that you get a well-rounded portfolio that provides diversity and stability.

  • Liquidity

Business funds are liquid assets that can be sold at any time, giving you flexibility in how you manage your assets.

Conclusion

A business fund in India is a mutual fund that invests entirely in equity securities of companies based in India. The types of investments such as shares, bonds, and convertible debentures can be made for the business fund.

Types of business funds include funds that invest in Indian stocks and bonds or funds that have a combination of both stock and bonds. These products can be used for short-term goals as well as long-term goals depending on your investment objectives.

However, you should be aware that small and mid-cap funds are extremely risky. While these funds have the potential of generating supernormal returns, they can lead to deep losses when the market takes a turn.

You can also choose an alternative best mutual fund in the small-cap category and meet your investment goals.

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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