Tata Small Cap Fund Direct Growth

Tata Small Cap Fund Direct Growth is a small-cap mutual fund that invests at least 65% of its assets in small-cap companies. SEBI (Securities and Exchange Board of India) has classified small-cap stocks as those that rank 251st and beyond on the stock market as per their market capitalization.

Small-cap companies are businesses that are small in size but have high growth potential. The fund manager allocates the remaining assets in equities other than small-cap companies, debt and money market instruments to diversify. The fund is benchmarked against Nifty Small Cap 250 TRI. 

Investment Strategy

The fund is managed by Mr. Chandraprakash, who has been managing the fund since 2018. Tata Small Cap Fund’s portfolio is built on a bottom-up approach. This includes researching high-growth stocks that are undervalued or underowned. 

Taxation On Tata Small Cap Mutual Fund

Tax on your gains from the Tata Small Cap Fund depends on how long you have held the fund for. All equity mutual funds sold within 12 months are considered Short-term Capital Gain (STCG) and investments sold after 12 months are considered Long-term Capital Gain (LTCG). The taxes are as follows:

• Long-term Capital Gain: Exemption of up to ₹1,25,000 and then 12.5%
• Short-term Capital Gain: 20% 

Who Should Invest In Tata Small Cap Fund

Small-cap mutual funds tend to face high market volatility owing to the nature of the companies they invest in. They are suitable for investors who:

-Have a long-term investment horizon

-Possess a high-risk appetite

-Are comfortable navigating market ups and downs

Allocation & Historical Returns

Currently, the fund's portfolio comprises 82.3% small-cap stocks, 0.00% large-cap stocks, and 7.63% mid-cap stocks.

With an AUM of ₹10529.0 crores, Tata Small Cap Fund Direct Growth generated a return of 6.5% in 1 year, 29.0% in 3 years, 36.8% in 5 years. while its benchmark index (Nifty Smallcap 250) generated 2.2% in 1 year, 27.9% in 3 years, and 34.7% in 5 years.