![]() ![]() SchemeĪs can be seen from the above table, the small cap funds universe has done extremely well across periods of 1 year, 3 years and since launch. The table below ranks small cap funds on AUM and also provides the returns over 1 year, 3 years and since inception. Small cap funds have an AUM of ₹170,173 crore, which makes it among the most popular equity thematic categories in India. That is why small cap funds have a problem finding enough stocks to invest in at higher levels, when flows increase. That means, when the fund of the size of the NISC Fund tries to buy a large quantity of small cap stocks, then such quantity is either not available or it leads to a surge in prices by the time the order is executed. The problem is that most of these stocks are either too small or they are not liquid enough or the basis risk is too high. Since there are over 4,000 listed stocks on the BSE, it still leaves a huge number of stocks to invest in the small cap space. The stocks with the top 100 ranks will qualify as large caps funds with rank 101 to 250 will qualify as mid-cap funds and stocks with rank of 250 and below would classify as small cap funds. Under this formula, all the stocks on the BSE and the NSE are ranked descending on market capitalization. A quick word on small cap fundsįor mutual funds in India, the definition of small cap funds is based on the ranking of funds as per the formula prescribed by AMFI. Obviously, holding cash for too long is also not a wise decision. Also, with a surge of flows, the AMC was concerned that there may not be adequate opportunities in the small cap space to deploy these funds profitably. One of the main reasons for this move is that the NISC Fund is already the small cap fund with the highest AUM and has been seeing a lot of flows of late. ![]() This will not only apply to fresh flows but also to any switch transactions into the NISC Fund. This restriction is effective from Friday, July 07, 2023. In a rather interesting move, the Nippon India Life Asset Management announced that it will stop accepting lump sum investments into one of its most popular, Nippon India Small Cap Fund (NISC). ![]()
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