Edelweiss Mutual Fund has launched Edelweiss Small Cap Fund, an open-ended scheme predominantly investing in small cap stocks.
Harshad Patwardhan, CIO – Equities, Edelweiss MF will manage this fund.
In a press release, Radhika Gupta, CEO, Edelweiss MF said, “Investing in small caps can be rewarding when last one year returns are negative, but underlying earnings are picking-up. We believe our experience in successfully managing our midcap fund over the last 10 years through bottom-up stock picking will help in identifying opportunities in the small cap segment for our customers.”
The fund house said, “Currently, small-cap index is down over 28% in last one year and thus may be a good time to invest in this category. Investment in small-caps generate relatively higher alpha – quality small cap outperform as they show stronger earnings growth compared to large caps. Small-caps also provides fund manager a wider basket to invest, over 2500 stocks are available in small-cap segment across many unique sectors not covered by large caps.
Somewhat similar to STP, the fund house offers a new facility called Smart Trigger enabled Plan (STEP), which helps an investor to invest in a staggered manner and mitigate market timing risk. This feature is available only during the NFO. Through this facility, investors can spread their investment in Edelweiss Small Cap Fund in 5 equal monthly instalments. Under this feature, 20% of the application money will be invested upfront in the fund. The remaining 80% will be invested in Edelweiss Liquid Fund and will switch to Edelweiss Small Cap Fund in 4 equal monthly instalments triggered by market dips.
Radhika said, “Since small-caps are volatile, we want investors to invest systematically using the STeP facility during the NFO period which can help mitigate market timing risk”.
