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The scheme will have a minimum 65% allocation in equity and equity-related instruments of small-cap companies and a maximum of 35% in other than small-cap companies, debt and money market instruments.
ITI Mutual Fund has launched its seventh fund -ITI Small Cap Fund. The NFO opens today and will close for subscription on February 10. The new scheme will be benchmarked against Nifty Small Cap 100 TRI.
According to a press release by the fund house, the minimum initial investment in the scheme is Rs 5,000 and in multiples of Re 1 thereafter. The additional investment amount is Rs 1,000 and in multiples of Re 1 thereafter. The scheme will have a minimum 65% allocation in equity and equity-related instruments of small-cap companies and a maximum of 35% in other than small-cap companies, debt and money market instruments. The fund will be jointly managed by George Heber Joseph and Pradeep Gokhale.
“The right time to invest in small caps is when the pessimism is the highest and the absolute valuation is very cheap for the small-cap segment of the market. Every five-seven years equity markets give an opportunity to invest in small caps at a very attractive valuation. In the year 2003, 2008 and 2013, small caps were very attractively valued and we believe the year 2020 is again providing a fantastic opportunity to invest in small caps at very cheap valuations. The differential valuations between large caps and small caps is at a decade high and this offers a significant opportunity to investors to invest in small caps and make significant alpha over large-cap stocks,” said George Heber Joseph, CEO & CIO, ITI Mutual Fund.
The press release says that ITI Small Cap Fund will have a well-diversified portfolio. Individual stock exposure will be capped at 3% of the AUM at the time of investment. The fund is benchmark and sector agnostic and at the time of purchase, the fund will stick to the small-cap universe only as defined by Amfi. At least 80% of the portfolio will be core stocks and tactical bets will not be more than 20%.
"The small-cap segment offers significant wealth creation opportunity as many positive economic measures taken by the government always tend to start yielding results after a lag. Timing is the key in investing in small caps as they are the breeding ground for multi-baggers and we strongly believe that this is the right time for investors to invest in small caps with an investment horizon of five-seven years," says George Heber Joseph.
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