When exploring the world of mutual funds, the Canara Robeco Mutual Fund stands out, especially in the Small Cap Fund segment. In this article, we delve into the specifics of the Canara Robeco Mutual Fund and the Canara Robeco Small Cap Fund, offering insight into their strategies, performance, and taxation implications.
Canara Robeco Mutual Fund
The Canara Robeco Mutual Fund is a well-known name in the mutual fund industry, offering a range of investment options. One of its notable offerings is the Canara Robeco Small Cap Fund, designed to generate capital appreciation primarily through investments in Small Cap stocks.
Investment Strategy
The Canara Robeco Mutual Fund focuses on long-term capital appreciation, with a portfolio primarily comprising equity and equity-related instruments, particularly value stocks. This approach is evident in the Canara Robeco Small Cap Fund, which follows a conservative investment strategy with holdings mostly in Large Cap stocks and debt instruments.
Performance Insights
The Canara Robeco Small Cap Fund, being 4 years and 9 months old, has shown impressive returns since its inception, delivering 26.54% returns. This performance is commendable, especially considering its conservative strategy in a volatile market segment.
Taxation Aspects
Understanding the taxation of mutual fund investments is crucial. For the Canara Robeco Mutual Fund,if units are sold after 1 year from the date of investment, gains up to Rs 1 lakh are exempt from tax. Gains over Rs 1 lakh are taxed at 10%. However, if sold within a year, the entire gain is taxed at 15%. Additionally, dividends are taxed according to the investor's tax slab, and a TDS of 10% is deducted for dividend income exceeding Rs. 5,000 in a financial year.
Canara Robeco Small Cap Fund: A Closer Look
The Canara Robeco Small Cap Fund is tailored for investors seeking long-term gains, particularly from small-cap stocks. It's a fund that can offer higher returns but comes with more significant ups and downs.
Risk Considerations
Investing in the Canara Robeco Small Cap Fund involves a higher level of risk compared to funds focusing on larger companies. The fund's performance can significantly fluctuate, making it suitable only for investors who can tolerate these swings and have a longer investment horizon.
Expense Ratio
The expense ratio, which reflects the fund's operational efficiency, for the Canara Robeco Small Cap Fund is 1.73. This figure is crucial for investors to consider as it directly impacts the net returns from the investment.
Conclusion
If you are an investor who is interested in small-cap stocks for the purpose of long-term capital appreciation, the Canara Robeco Mutual Fund, and more specifically the Canara Robeco Small Cap Fund, provides an attractive investment opportunities. Although the fund has shown a strong performance, it is essential to take into consideration the risks that are associated with it as well as the implications that it has for taxation. This fund is a one-of-a-kind offering in the small-cap space due to the conservative strategy that it has adopted, which focuses on a combination of large-cap stocks and debt instruments.
