Asset management company (AMC) PGIM India Mutual Fund on Friday launched a new fund offer (NFO), ‘PGIM India Small Cap Fund’, for a small-cap scheme. You can earn great returns by investing just Rs 5,000. This NFO is opening for subscription from today. It will be closed on July 23. The small-cap scheme is a mix of top-down and bottom-up investment approaches. Nifty Small Cap 100 total return index is NFO’s benchmark index.
NFO aims to generate long-term capital formation through profits primarily through various investments made in the equity and equity-linked instruments of small-cap companies.
The new fund will invest a minimum of 65% of its corpus in small-cap companies and seek to leverage the momentum of other equity and equity-related products to make the portfolio attractive, PGIM India Mutual Fund said in a statement. The fund will be managed by three persons — Kumaresh Ramakrishnan (for debt and money market investments), Aniruddha Naha (for equity investments) and Ravi Adukia (for overseas investments).
It is a common belief that investments made in small caps have good potential for wealth creation and high returns in the long run. As the economic activities are now getting on track again and demand for services and goods is picking up, the benefit is expected in the full value chain across sectors including small-cap companies. Along with the improvement in economic activities, the corporate profits of small-cap companies are also expected to improve.
Ajit Menon, CEO, PGIM India Mutual Fund has asserted that companies listed in the small-cap segment would benefit the most from the growth in economic activities post-COVID-19 related restrictions.
“Initiatives such as significant improvement in corporate earnings, efforts to boost manufacturing through PLI schemes by the government in tandem with several sectors, lower taxation, and various other concessions will have an impact in the coming months, which will benefit small-caps. So to provide quality investment opportunities, we have launched PGIM India Small Cap Fund,” he said.
He added that the objective is to limit investments in large-caps to benefit from the growth of the sectors by providing an opportunity to invest in a range of business categories such as textiles, construction, real estate, chemicals and agrochemicals and industrial paper.