Groww Mutual Fund has launched a new Small Cap Fund, which is an open-ended mutual fund scheme. This fund will mainly invest in shares of small-cap companies.
The New Fund Offer (NFO) is open for subscription from January 8 to January 22. The main objective of this fund is to help investors generate good long-term returns by investing in small-cap stocks.
Investment Strategy and Benchmark
The fund will follow Groww Mutual Fund’s QGaRP (Quality, Growth at Reasonable Price) framework to select stocks.
Under this approach, the fund will focus on companies that have strong fundamentals, good growth potential, and are available at reasonable valuations.
The fund will invest only in small-cap stocks and will not invest in large-cap companies. The performance of the fund will be measured against the Nifty Smallcap 250 Index – TRI, which is also the official benchmark of the scheme.
Growth Opportunities for Small-Cap Companies
According to the fund house, the Indian economy is going through major structural changes.
Government spending on infrastructure is rising, capital markets are becoming stronger, access to formal credit is increasing, and the use of digital platforms is growing rapidly.
These changes create a strong environment for small-cap companies to grow quickly, expand their businesses, and enter new markets. Because of this, small-cap stocks have the potential to deliver strong returns over the long term.
Market Outlook for Small-Cap Stocks in 2025
Analysts believe that 2025 may not be a strong year for most small-cap stocks. The small-cap index is expected to underperform due to recent declines in stock prices, which have reduced overall valuations.
However, even though prices have fallen, the fundamentals of many companies have improved, which may benefit long-term investors.
The fund will be managed by Anupam Tiwari, who will be responsible for stock selection and overall fund management.
Minimum Investment and Exit Load Details
Investors can start investing in the Groww Small Cap Fund with a minimum amount of ₹500, making it accessible to small investors as well.
If an investor withdraws money within one year, an exit load of 1% will be charged. There is no exit load after one year.
Risk Factors Investors Should Know
This fund is suitable for investors who want exposure to small-cap stocks and are willing to stay invested for a long time. Small-cap stocks are highly volatile and involve higher risk compared to large-cap or mid-cap stocks.
Investors who are not comfortable with high risk or short-term market fluctuations should avoid investing in small-cap funds and consider safer investment options instead.
