The fund will invest a minimum of 65% assets in small cap stocks. The scheme will also invest in equity related instruments and overseas stocks. The different parts of the portfolio will be managed by three fund managers. The scheme will be managed by Aniruddha Naha for equity investments, Kumaresh Ramakrishnan for debt and money market investments and Ravi Adukia for overseas investments.
According to the press release, 10% of the units allotted in this scheme may be redeemed or switched-out to debt schemes or PGIM India Arbitrage Fund without any exit load within 90 days from the date of allotment of NFO. Any redemptions in excess of the above mentioned limit would be subject to an exit load of 0.50%. If the units are redeemed after 90 days from the date of allotment of units, then no exit load will be applicable.
“The best pockets of returns over time are good quality small caps which are supported by earnings and reasonable valuations. They benefit from both the legs of earnings growth and a chance of a PE rerating, which helps them graduate from a small cap to a midcap and eventually a large cap,” said Aniruddha Naha, fund manager, PGIM India Small Cap Fund.
“We believe that listed entities in the small-cap segment are the biggest beneficiaries of developments such as significant recovery in corporate earnings, expected in the coming months coupled with multiple tailwinds like the government trying to boost manufacturing through PLI schemes, lower taxation, and various concessions. Industry consolidation is more pronounced in the areas where the small caps operate because most small-cap companies compete with the unorganized players. In order to capture quality investment opportunities, we have launched the PGIM India Small Cap Fund. Idea is to help investors gain exposure to business segments like construction, textiles, real estate, chemicals and agrochemicals, Industrials, paper and the like that find limited representation in the large-cap space,” said Ajit
, CEO, PGIM India Mutual Fund.