Small Cap Fund – An open ended equity scheme predominantly investing in small cap stocks. Small cap stocks are defined as 251st company onwards in terms of full market capitalization. Small cap stocks are growing businesses with potential to become mid cap or large cap in long term (8-10 years). Minimum investment in equity & equity related instruments of small cap companies- 65% of total assets
Investors who are looking to invest money for at least 5-7 years and are looking for high returns. Overall, small caps tend to be highly volatile and investors should be prepared to weather market ups and downs. It is recommended to use systematic investment plan (SIP) for recurring monthly investments or systematic transfer plan (STP) for investing lumpsum in these funds.
The minimum investment varies from scheme to scheme. It could range between Rs.100 to Rs.5,000.
Small Cap Funds receive the same tax treatment as other equity funds.