Investment Objective
Bank of India Small Cap Fund seeks to generate long term capital appreciation by investing primarily in equity and equity-related instruments of small cap companies.
Investment Strategy
- Bank of India Small Cap Fund invests at least 65% of its portfolio in the stocks of small cap companies having potential for capital appreciation and sustainable business models.
- The fund can allocate 35% of its portfolio in the equity and equity related instruments of other companies.
- It uses a combination of both top-down and bottom-down approaches for stock picking.
- It invests in companies having a long growth runway by registering market share gains, showing reinvestment potential and growth longevity and sustainable earnings growth.
- It focuses on companies with strong business fundamentals — those having sustainable competitive advantage, sound balance sheet, efficient capital allocation and an ROIC (Return on Invested Capital) improving or higher than the cost of capital.
- It also emphasizes the quality of the company’s management based on its capital allocation history, execution track record, skin in the game, hunger for growth and respect for minority shareholders.
- The fund maintains agility to shift across sectors, business cycles and earnings cycles.
Who Should Invest
- Individuals having a long term investment horizon and seeking to benefit from the higher growth potential of small cap companies.
- Investors having higher high risk appetite to tolerate higher volatility associated with small cap companies.