The SBI Small Cap Fund Direct-Growth is a noteworthy offering from SBI Mutual Fund in the Small Cap segment, operational for over 11 years since its inception on January 1, 2013. As of March 31, 2024, this fund commands an impressive ₹28,375 Crores in Assets Under Management (AUM), marking its stature as a medium-sized fund. With an expense ratio of 0.67%, it aligns well with industry standards.

This fund has consistently provided an average annual return of 26.95% since its launch, effectively doubling investments approximately every 3 years. The consistency in delivering returns is on par with similar funds, with only an average capability to mitigate losses during market downturns.

In sector allocation, substantial investment is directed towards financial, services, consumer discretionary, capital goods, and consumer staples sectors. Notably, it has a lower exposure to financial and service sectors compared to its peers. The fund's primary holdings are Nifty 50, Blue Star Ltd., Finolex Industries Ltd., Kalpataru Projects International Ltd., GE T&D India Ltd., Carborundum Universal Ltd., Chalet Hotels Ltd., SBFC Finance Ltd., Lemon Tree Hotels Ltd., and CMS Info Systems Ltd.

As of May 31, 2024, the asset allocation reveals 92.72% in equity, further broken down into 88.01% in small-cap stocks and 4.71% in mid-cap stocks, with no exposure to large-cap stocks. The remaining 7.28% is in other assets.

Performance metrics for the past year show a trailing return of 44.96%, surpassing the category average of 50.14%. Over extended periods, it has outperformed the category average.

In terms of risk and return, this fund presents an alpha of 5.02, suggesting underperformance in surpassing benchmarks. The Sharpe ratio stands at 1.43, indicating less favorable risk-adjusted returns, while a beta of 0.61 illustrates lower sensitivity to market volatility. Stability in returns is evidenced by a standard deviation of 11.6, which is more consistent than the category average.

Overall, the SBI Small Cap Fund Direct-Growth serves as a robust medium-sized option in its category, boasting commendable average annual returns. Nevertheless, potential investors should consider its moderate loss control in declining markets and underperformance relative to benchmarks despite superior returns. These factors merit careful consideration prior to investing in this Small Cap fund.