Top two Small cap funds that can revitalise your portfolio for the long run

Small-cap stocks along with mid-cap stocks have been the flavour of the year so far in 2016 with the respective indices outperforming the Sensex on a YTD basis. Nifty Free Float Midcap 100 index has generated over 29.41 per cent on an annualised basis over three years; whereas the index returns have been almost 17 per cent over past five years thus outperforming the large cap index. Sensex has delivered approximately 11 per cent over a three period on an annualised basis. Sensex returns over five years stands at 10 per cent on an annualised basis.

DSP BlackRock Micro Cap Fund- regular plan (DBMCF) and L&T Midcap Fund (LMF) are two funds in the small-cap category that have been star performers and have been beating the benchmark index consistently. For DBMCF the three years' annualised returns stand at a whopping 50 per cent; whereas for LMF the returns over similar period stand at 38 per cent. That essentially means that for an investor who had invested Rs 1,00,000 in the DBMCF fund three years back, the current valuation stands at approximately Rs 3,37,500 and for the LMF fund the current valuation stands at Rs 2,62,000. 

Going by the track record investors can focus on these two funds for long term investments.