Investment Objective
Nippon India Small Cap Fund, formerly known as Reliance Small Cap Fund, aims to generate capital appreciation over the long term by investing predominantly in equity and equity related instruments of small cap companies. The fund’s secondary aim is to generate consistent returns by investing in debt and money market securities.
Investment Strategies
- Nippon India Small Cap Fund seeks to identify companies demonstrating growth at reasonable valuation.
- The scheme seeks to create a diversified portfolio without any sector bias.
- The fund is a relatively high-risk/high-return fund as it allocates primarily in small-cap stocks to maximize the return potential and makes tactical allocation to other market caps to reduce risk.
- It focuses on good quality companies with scalable businesses and strong management, which are currently overlooked by the market because of non-fundamental reasons.
- It uses a bottom-up investment approach to identify promising companies across various sectors and themes.
- The fund makes differentiated investments in high-conviction ideas driven by internal research capabilities to generate “Sustained Alpha,” – “Exclusive Alpha”. It also makes opportunistic investments to benefit from new or changing trends
- The fund aims to manage its risks by:
- focusing on ideas with a high margin of safety
- building a well-diversified portfolio across stocks and sectors
- keeping single stock exposure capped at 5%
- holding investments over longer periods to smoothen volatility
Who Should Invest
- Investors looking for capital appreciation in the long term
- Those seeking to invest in equity and equity related securities of small cap companies
- Those looking to invest in a portfolio having an optimal mix of growth, economic revival, value & thematic stocks