Small-cap funds are mutual funds that invest at least 65% of the corpus in companies ranked outside the top 250 (251st onwards) by market capitalisation. These businesses are smaller in scale, less established, and often operate in emerging sectors of the economy.

For many investors, they remain an unfamiliar territory compared to large-cap and mid-cap funds that are more popular. Still, their potential to offer strong growth has led to a growing discussion: could these funds be the hidden gems of mutual fund investments? The answer leans strongly towards yes, and here are the 5 qualities that make them valuable for long-term wealth creation.

1. Higher growth potential

A small-cap fund offers higher growth potential since it invests in younger, more agile companies. Unlike large, es

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