Edelweiss Mutual Fund has launched a new fund Edelweiss Small Cap Fund. The NFO opened for subscription on January 18 and will close on February 1, 2019. The last one year has been very difficult for small cap stocks with the Nifty Small Cap 250 Index falling 28% in 2018. Deep corrections however, create attractive investment opportunities and this may be an exciting time for investing in small cap stocks.
Why Small Cap?
Why invest in small cap now?
Why invest in Edelweiss Small Cap Fund?
- The fund has a unique portfolio allocation strategy to ensure performance consistency. The fund manager will invest in 4 different buckets – strategic (core portfolio for buy and hold), tactical (to leverage cyclical opportunities), options (high risk/return) and defensive (to provide stability).
- The fund will focus on liquidity (to reduce impact cost), diversification (to manage concentration and liquidity risk) and rigorous quality check (management quality and earnings visibility).
- The fund manager (Harish Patwardhan) has a long and successful investment track record. Edelweiss Midcap Fund managed by MrPatwardhan has outperformed its benchmark index across different time-scales; 23% annualized returns in the last 5 years.
- The fund manager will follow a process driven investment approach backed by in-depth research capabilities of the AMC.
Who should invest in the NFO?
- Investors who want to invest for more than 5 years and can be patient during volatile markets
- Investors who have higher risk appetite and want aggressive portfolio allocation
- Investors who are looking to invest in small-caps as a part of asset allocation
Reduce timing risk through STeP
Though small stocks have corrected sharply over the past 12 months, further corrections cannot be ruled out. Edelweiss’ STeP investment facility available with this NFO will enable you to invest systematically in the fund in staggered based on price and time triggers.
If you opt for STeP, 20% of your subscription amount will be invested in the Small Cap Fund and the balance in the Edelweiss Liquid Fund. The investment in liquid fund will be transferred to the Small Cap Fund in 4 installments on monthly dips. Each transfer will be triggered if there is a 3% correction in the small cap index or the last date of the month, if the trigger is not hit during the month. The STeP facility will allow you to take advantage of volatility when investing in lump sum.
Key NFO Features
NFO Period: January 18 to February 1, 2019
Exit Load: If units are redeemed or switched out before 365 days – 1%, if units are redeemed or switched out after 365 days – Nil
Switches: Switches from equity schemes and other schemes – Feb1, 2019; till cut off time
Plans and Options: Direct and Regular Plan with Growth and Dividend Payout & Sweep
Minimum Investment Amount: Rs.5,000/- (plus in multiple of Re. 1)
Fund Manager: Harish Patwardhan
Benchmark Index: Nifty Small Cap 250 Total Returns Index
Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.