IDFC Mutual Fund has filed draft offer documents with the Securities and Exchange Board of India (SEBI) for IDFC Emerging Business Fund, an open-ended equity scheme that will mainly invest in small cap stocks. A company’s market capitalization is the market value of its outstanding shares. According to SEBI, small cap companies are defined as the 251st company and below in terms of market cap.
In line with small cap classifications, the scheme will invest a minimum 65 percent of its assets in small cap stocks. The scheme may also invest up to 35 percent stocks other than small cap companies, debt securities and money market instruments. Investment in REITs and InvITs will be capped at 10 percent.
The S&P BSE Small Cap Index (Total Return Variant) will be used as the benchmark for the IDFC Emerging Business Fund. The index represents the India’s small cap segment and thus, is apt to be the benchmark for this scheme.
|Index Name||1-yr Returns (%)||3-yr Returns (%)||5-yr Returns (%)|
|S&P BSE Small Cap Index (Total Return Variant)||-22.93||8.37||18.60|
*Returns data as of Dec. 31, 2018
The fund will be co-managed by Anoop Bhaskar, Daylynn Pinto and Kartik Mehta. Other schemes managed or co-managed by Bhaskar are IDFC Classic Equity Fund, the equity portion of IDFC Balanced Fund, IDFC Premier Equity Fund, among others. The fund house’s top performing scheme, co-managed by Bhankar and Pinto, is IDFC Sterling Equity Fund with five year returns of 17.41 percent. (As on January 2, 2019).