Groww Mutual Fund has launched a new Small Cap Fund, which is an open-ended scheme. This fund will mainly invest in shares of small-cap companies.
The New Fund Offer (NFO) is open for investment from January 8 to January 22. The main goal of this fund is to generate good long-term returns for investors.
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Benchmark and Investment Strategy
The benchmark index for this fund is the Nifty Smallcap 250 Index – TRI.
Groww Mutual Fund will follow its QGaRP (Quality Growth at Reasonable Price) framework to select stocks.
This strategy focuses on choosing companies that show strong quality and growth potential at fair valuations.
The fund will invest only in small-cap stocks and will not invest in large-cap companies.
Growth Opportunities for Small-Cap Companies
According to Groww Mutual Fund, the Indian economy is going through major structural changes. Infrastructure spending is rising, capital markets are growing, interest in formal credit is increasing,
and digital platforms are expanding rapidly. These developments create strong growth opportunities for small-cap companies, allowing them to expand their businesses and enter new markets.
Outlook for Small-Cap Stocks in 2025
Analysts believe that 2025 may not be a strong year for small-cap stocks. The small-cap index is expected to underperform due to recent declines in stock prices, which have reduced valuations.
However, despite this, the fundamentals of many small-cap companies have improved, making this an interesting long-term investment opportunity.
The fund will be managed by Anupam Tiwari.
Investment Amount and Risk Factors
Investors can start investing in the Groww Small Cap Fund with a minimum amount of ₹500. An exit load of 1% will be charged if the investment is withdrawn within one year.
This scheme is suitable for investors who want exposure to small-cap stocks. However, small-cap stocks are highly volatile and involve high risk. Investors who are not comfortable with high risk should avoid investing in small-cap funds.