The market capitalisation of a stock is an indicator of the value and size of a listed stock. It is calculated by multiplying the number of its shares outstanding in the market by its market trading value.

Indian listed stocks are classified into three categories basis their market cap.

1. Large cap stocks – Ranked 1 to 100 in terms of market cap
2. Mid cap stocks – Ranked 101 to 250 in terms of market cap
3. Small cap stocks – All remaining listed stocks, rank 251 onwards in terms of market cap

Apart from being smaller in size, small cap companies tend to have scope for considerable growth. Being at the cusp of growth, they have the potential to grow at a higher rate over time. At the same time, they may also be subject to higher risk and market fluctuations. Being relatively undiscovered, they may also be available at better valuations in the market.

A small cap fund is an equity-oriented mutual fund scheme that invests at least 65% of its net assets in small cap stocks.

This fund seeks out well priced small cap stocks from amongst the entire universe of available small cap stocks. It builds a portfolio of select small cap stocks that have potential for long term capital growth. Fundamentals, management quality and business model are some of the key parameters considered in this selection.

Investors have the potential to earn long term capital appreciation for their investments in the Aditya Birla Sun Life Small Cap fund.
Additionally, it also has other benefits such as need for low minimum investment, sectoral diversification, tax efficiency, expert fund management etc.

No, Aditya Birla Sun Life Small Cap fund does not have a sector bias. It invests in small cap stocks basis their individual merits irrespective of the sector it belongs to.

Small cap funds can be an investment choice for investors who wish to invest in emerging small cap companies, with long term growth potential but who also have the potential to take on risks, especially over the short term.

The fund offers a direct plan and a regular plan.
Direct Plan is only for investors who purchase /subscribe Units in a Scheme directly with the Mutual Fund and is not available for investors who route their investments through a Distributor. The expense ratio of a direct plan fund is lower.
A regular plan is one in which investors’ investment in the fund are routed through a broker or distributor. The expense ratio of a regular plan fund is higher.

Each plan will also have following options:

Growth Option – Under this, returns of the fund are reinvested in the fund itself. These will reflect in the increase in NAV of the fund.

Income Distribution cum Capital Withdrawal (“IDCW”) Option

(Payout of IDCW/ Reinvestment of IDCW/ IDCW Sweep Facility) ^
Under this, returns of the fund are distributed to investors as IDCW Investors can opt for IDCW pay out or IDCW reinvestment wherein they purchase more units of the fund with the income distributed.

^the amounts can be distributed out of investors capital (Equalization Reserve), which is part of sale price that represents realized gains Note: IDCW is declared subject to the availability of distributable surplus as computed in accordance with SEBI Regulations. It must be distinctly understood that actual declaration of IDCW and frequency thereof is at the discretion of trustees. There is no assurance or guarantee to Unitholders as to the rate of IDCW distribution nor that the IDCW will be paid regularly.

Exit load:

- For redemption / switch-out of units on or before 90 days from the date of allotment: 1.00% of applicable NAV.
- For redemption / switch-out of units after 90 days from the date of allotment: Nil.
Exit Load is NIL for units issued in Reinvestment of IDCW.

The fund applies an expense ratio. This is intended to cover fund management and other administrative costs of the fund.

No, having a demat account is not necessary for investing in this fund.