Overview of Nippon India Small Cap Fund

Have you ever wondered how you can better your growth potential? The Nippon India Small Cap Fund allows you to strengthen your potential. The scheme was incepted on September 16, 2010, by the reputed fund house Nippon India Mutual Funds. The scheme gives you long-term growth that makes you stay in the market.

Moreover, the scheme invests in small cap firms. These firms have a capitalization below Rs. 5000 Crores. The increasing demand of the nation gives rise to a new beginning of emerging companies. These firms have the potential to generate impressive earnings.

In addition, the motto of the scheme is to invest in small cap firms and generate high earnings. This scheme mitigates the market risks and helps you to balance your finances. Moreover, the scheme has an experienced team with expertise in finances. They help you from the beginning to the end while investing. They keep your requirements on priority and design strategies accordingly.

Additionally, the scheme has outperformed the benchmark NIFTY Small Cap 250 TRI. Furthermore, the scheme has a CAGR of 22.03% since its inception. Moreover, the top holdings of the scheme are the Multi Commodity Exchange of India, HDFC Bank Ltd., Tube Investments of India Ltd., and others.

To elaborate more on this scheme. Let’s dive into the pool by exploring its distinct perspectives.

What are the Features of the Nippon India Small Cap Fund?

To further illustrate the scheme, let’s begin by learning about its features.

• Strong-Potential

The growing nation demands new solutions to ease their lives. This growing demand gives rise to new firms with their exciting innovations. Hence, these firms have the potential to produce impressive earnings. The growing pace of the firms sometimes faces downturns. As a result, the scheme makes you strong to make you stand in the market.

• Long-term Investments

The Nippon India Small Cap Fund is more beneficial with investments for at least 5-7 years or more. As you all know slow and steady wins the race. The same is true here with your investment for a long time making you more strong financially. The scheme benefits you by giving good earnings with going time.

• Variation in Portfolio

As discussed above, the scheme invests in new emerging firms. These emerging firms are unexplored in the market. The scheme becomes a door for you to explore this unseen part of the market by investing in such companies. Additionally, this exploration of unexplored firms brings a variation to your portfolio.

• Investment Methods

The scheme has distinct investment methods for you to invest in it. The investment methods are lump sum and systematic investment plans. Both of these methods have different requirements. To illustrate this point more, the lumpsum requires a huge amount to start at once. On the other hand, a systematic investment plan follows a regular investing procedure.

• Management Team

The scheme has an expert team with a deep knowledge of finances and an understanding of the market. They look upon the future demands of the market by analyzing the market statistics. Furthermore, they design the strategies according to your requirements based on market research. This experienced team helps you from beginning to end while investing in the scheme.

• High Earnings

The developing nation gives a chance to new firms to stand out in the market. These firms have the enthusiasm to showcase their caliber and deliver new ideas. When the firms successfully stand out in the market. Hence, the scheme outperforms and gives you with high-earnings.

Despite many features, there are some risks associated with the scheme. Let’s move on to the next section to learn about them.

What are the Risk Factors of Nippon India Small Cap Fund?

You should consider the mentioned risks that are associated with the scheme:

• Market Fluctuations

The market has unexpected ups and downs. When the market is not doing well also the firms are suffering from the downturns. Hence, the scheme will automatically underperform and don’t produce enough returns. As a result, it shows a slight effect on your earnings.

• Less Transparency

The emerging companies are less explored in the market. Therefore, there is less information about the firms and their performance. This creates a transparency issue for the scheme about the productivity of the firms. In this way, it becomes a challenge for you to invest in the small cap funds or not.

• Expense Ratio

The small cap firms require more research in the market. This research takes time and money. Moreover, the management team takes the cost of the research and operations. Additionally, for designing the strategies. In this way, the scheme’s expense ratio becomes quite expensive because of the high cost. Hence, it makes a fall in your net earnings over time.

• Stability Issue

In the early stages, the emerging firms are less stable than the large and mid cap firms. These newly entered firms don’t have enough financial stability. To illustrate this, in case the firm is not getting the productivity in its performance. Consequently, it affects the performance of Nippon India Small Cap Fund. Thus, it shows the impact on your net earnings.

• Liquidity Risk

It is quite challenging to invest and redeem without affecting the actual value. The frequent buying and selling increases the rate of expense ratio. Consequently, it affects the return rate of the scheme. Thus, it results in a lowering of your net income.

Expanding on the scheme, let’s learn the steps that you can follow to start investing in it.

How can you Invest in the Nippon India Small Cap Fund?

Here are some points outlined below that you can follow to start investing in the scheme:

1. Select the Platform

Choose a platform to start investing in the scheme. It can be direct through the official website of the fund house. Additionally, third-party apps or through financial advisors.

2. Do KYC Verification

Do KYC (Know Your Customer) verification to validate and authenticate your bank account. It requires your PAN details and Aadhar Card.

3. Choose Investment Method

There are lump sum and systematic investment plans available in the scheme. Choose the investment method from them according to your reliability and affordability.

4. Review and Confirm

Recheck and confirm the terms and conditions related to the scheme.

Moving forward with the discussion of the scheme. Let’s summarize the scheme in the conclusion.

Conclusion

 To summarize the scheme, it has many features and risks. Furthermore, it gives you long-term growth and makes you potentially strong. Are you afraid of taking risks and have an average income?

Don’t worry, here is a way that lessen your fear of risks. Just tap into SIP investments. This investment method requires a small amount for investing. In addition, it is adjustable based on your conditions. It follows the procedure of regular intervals such as monthly, quarterly, and yearly.