The Wealth Company Small Cap Fund- Direct-IDCW

The Wealth Company Small Cap Fund- Direct-IDCW lags behind most of its peers in the Small Cap category. TopFund's composite Health Score, which weighs rating, 3-year CAGR, expense ratio and fund size, puts it at 18/100.

Cost: At 2.16%, the expense ratio runs 167% above the Small Cap category average of 0.81%. That gap is worth weighing against the fund's actual performance versus cheaper peers before committing to a long SIP.

Risk-adjusted performance: Over the trailing 1-year period, the fund shows a strong Sharpe ratio of 5.0 — the fund has generated solid returns relative to the volatility it exposed investors to. Separately, annualised volatility of 13.92% is fairly typical for actively managed equity funds.

Who should invest: This fund is best suited to investors with a 7-10 year horizon who can stomach 30-40% drawdowns in a bad year in exchange for higher long-term growth potential. Given the Very High risk rating, this fund is not suited to short-term goals or investors who may need to exit within 2-3 years.