Investing in small-cap stocks provides opportunities for long-term growth, but it also comes with a higher level of risk. For investors looking to diversify their portfolios with small-cap equity exposure, the Tata Small Cap Fund stands out as an excellent option. This blog post will cover all essential aspects of the Tata Small Cap Fund, including its investment objective, NAV, performance, top holdings, sectors, and more.
The Tata Small Cap Fund is an open-ended equity scheme designed to invest predominantly in small-cap stocks. The primary goal is to generate long-term capital appreciation by investing in equity and equity-related instruments of small-cap companies. While the fund aims for substantial growth, there is no guarantee of returns, and past performance may not predict future success.
Since its launch on November 12, 2018, the fund has been managed by Chandraprakash Padiyar, with 23 years of experience, and Jeetendra Khatri, an Assistant Fund Manager with 16 years of expertise.
Here’s a table summarizing the key facts of the Tata Small Cap Fund:
| Feature | Details |
|---|---|
| Fund Type | Open-ended Equity Scheme |
| Inception Date | November 12, 2018 |
| Fund Manager | Chandraprakash Padiyar (23 years experience) |
| Assistant Fund Manager | Jeetendra Khatri (16 years experience) |
| Minimum Investment | ₹5,000 (new investors) |
| Additional Investment | ₹1,000 (existing investors) |
| Expense Ratio | 0.34% (Direct), 1.70% (Regular) |
| Benchmark | Nifty Smallcap 250 TRI |
| Risk Level | High |
| Exit Load | 1% (within 12 months) |
| NAV (as of Oct 31, 2024) | ₹48.31 (Direct Growth) |
| Top Sector Exposure | Capital Goods, Chemicals, Services, Healthcare |
| AUM | ₹9,463.78 Crore (as of Oct 2024) |
The investment objective of the Tata Small Cap Fund is to generate long-term capital growth by predominantly investing in the equity instruments of small-cap companies. It is important to note that the fund does not assure or guarantee any returns, and the performance may vary based on market conditions.
As of October 31, 2024, the Net Asset Values (NAV) for different plans of the Tata Small Cap Fund are as follows:
| Plan | NAV (₹) |
|---|---|
| Direct – IDCW | 48.31 |
| Direct – Growth | 48.31 |
| Regular – IDCW | 43.43 |
| Regular – Growth | 43.43 |
The performance of the Tata Small Cap Fund has been impressive, especially for investors who have participated in Systematic Investment Plans (SIP). Below is the fund’s performance in different time periods:
| Period | Tata Small Cap Fund (%) | Benchmark – Nifty Smallcap 250 TRI (%) |
|---|---|---|
| 1 Year | 45.64% | 29.98% |
| 3 Years | 36.16% | 34.79% |
| 5 Years | 36.75% | 35.02% |
| Since Inception | 34.17% | 31.95% |
As of October 31, 2024, the top 10 holdings of the Tata Small Cap Fund are:
| Issuer Name | % to NAV |
|---|---|
| Basf India Ltd. | 6.17% |
| Kirloskar Pneumatic Co. Ltd. | 3.96% |
| Quess Corp Ltd. | 3.67% |
| IDFC First Bank Ltd. | 3.31% |
| Godrej Industries Ltd. | 3.31% |
| Time Technoplast Ltd. | 3.18% |
| Elantas Beck India Ltd. | 3.02% |
| Radico Khaitan Ltd. | 2.93% |
| Anant Raj Ltd. | 2.85% |
| Uti Asset Management Co. Ltd. | 2.77% |
The Tata Small Cap Fund provides exposure to a wide range of sectors, with the top 10 sectors as follows:
| Sector | % to NAV |
|---|---|
| Capital Goods | 19.39% |
| Chemicals | 11.00% |
| Services | 10.17% |
| Healthcare | 9.15% |
| Financial Services | 8.91% |
| FMCG (Fast-Moving Consumer Goods) | 5.45% |
| Realty | 4.93% |
| Consumer Services | 4.30% |
| Consumer Durables | 4.02% |
| Information Technology | 3.98% |
Like all equity mutual funds, the Tata Small Cap Fund is subject to market risks. It has an annualized standard deviation (a measure of volatility) of 18.12%, which indicates relatively high volatility. Small-cap stocks can be highly sensitive to market fluctuations, making the fund more volatile than large-cap funds.
The minimum initial investment required to start investing in the Tata Small Cap Fund is ₹5,000, and additional investments can be made in multiples of ₹1,000 thereafter. Investors have the option to choose between Direct and Regular plans, with Direct plans offering a lower expense ratio (0.34%) compared to Regular plans (1.70%).
| Question | Answer |
|---|---|
| What is the investment objective of the Fund? | The fund aims to generate long-term capital appreciation by predominantly investing in small-cap stocks. |
| What is the minimum amount required to invest in this fund? | The minimum investment amount is ₹5,000 for new investors and ₹1,000 for existing investors. |
| What are the top sectors in Fund? | The fund’s top sectors include Capital Goods, Chemicals, Services, Healthcare, and Financial Services. |
| How has the Fund performed historically? | The fund has delivered returns of 45.64% over the past year, 36.16% over 3 years, and 36.75% over 5 years. |
| What is the NAV of Tata Small Cap Fund? | As of October 31, 2024, the NAV for the Direct Growth Plan is ₹48.31. |
| Who manages the Fund? | The fund is managed by Chandraprakash Padiyar and Jeetendra Khatri. |
| What is the benchmark for this fund? | The benchmark for Tata Small Cap Fund is Nifty Smallcap 250 TRI. |
| What are the risks associated with investing in the Tata Small Cap Fund? | Small-cap stocks are known for higher volatility. The Tata Small Cap Fund has an annualized standard deviation of 18.12%, indicating a relatively high level of risk. |
| Can I redeem my investments in Tata Small Cap Fund anytime? | Yes, the fund has no entry load, but it does have an exit load of 1% if redeemed within 12 months from the date of investment. |
| What are the advantages of investing in Tata Small Cap Fund? | The fund offers long-term growth potential by investing in small-cap stocks, with the advantage of professional fund management and diversification across sectors. |
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