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Small-cap stocks account for a significant share of the Indian equity market with more than 4500 companies. Out of these, around 500 stocks have a market cap of Rs. is more than 2000 crores. Hence, the small-cap category offers investors a wider range of stocks to invest in compared to the large-cap and mid-cap categories.
Mumbai One of India’s leading life insurance companies Tata AIA Life Insurance (Tata AIA) has launched its first small-cap fund Tata AIA Small Cap Discovery Fund. This new fund will offer policyholders a long-term capital creation opportunity by investing in small-cap market capitalization stocks. This new fund offering window per unit is Rs. 10 will be open from July 10 to July 24, 2023, applicable for NFO period only.
Commenting on the launch of the Small-Cap Discovery Fund, Harshad Patil, Executive Vice President and Chief Investment Officer, Tata AIA Life Insurance said,
The government is focused on formalizing the economy during the recession, which will greatly benefit small businesses.
Additionally, growth in demand, increase in population and support for manufacturing will drive many smaller companies to become dominant in these sectors. Given these factors, Tata AIA Small-Cap Discovery Fund offers our policyholders the best opportunity to maximize their investment by spotting such opportunities early and investing in them for the medium to long term.”
Small-cap stocks account for a significant share of the Indian equity market with more than 4500 companies. Out of these, around 500 stocks have a market cap of Rs. is more than 2000 crores. Hence, the small-cap category offers investors a wider range of stocks to invest in compared to the large-cap and mid-cap categories.
However, many of these companies are sensitive to high volatility as changing market dynamics can affect their performance. Hence investors need to adopt a long-term investment approach to get good returns in this fund.
Small cap stocks have many advantages for investors
Nifty Small Cap 100 trades at a discount to two-year average PE (14.7) compared to Nifty 50 (22.08).
The Nifty Small Cap Index has given excellent returns in one year (14.3 per cent), three years (41 per cent) and since its inception (13.6 per cent).
Tata AIA funds have often outperformed the benchmark. The table below shows the returns for five years
| ફંડ (5 વર્ષનું રિટર્ન | તાતા એઆઇએ ફંડ રિટર્ન | બેન્ચમાર્ક રિટર્ન |
| તાતા એઆઇએ મલ્ટી કેપ ફંડ | 21.73% | 12.42% |
| તાતા એઆઇએ ટોપ 200 ફંડ | 21.20% | 12.42% |
| તાતા એઆઇએ ઇન્ડિયા કન્ઝપ્શન ફંડ | 20.35% | 12.42% |