Introduction
What if you could invest in a fund that builds higher returns for you with lower risk? This is what Tata Small Cap Fund did in the last 5 years by showing lower volatility but great returns.
This is a small cap scheme that was started by Tata Mutual Fund in 2018. The goal of this fund is to invest in small companies that can make big returns. In just 7 years, the fund gained popularity among investors. Even though the small cap market is considered a higher volatile market but if you look at this fund's past results, you will realize why it is one of the top fund in small cap category.
In this article, you will learn about its investing strategy, key benefits and many more. So keep reading to explore everything.
What is the Tata Small Cap Fund?
The fund is a small category scheme by Tata Mutual Fund which is the oldest asset management company. Its main focus is to invest in small-sized companies whose market value is less than Rs 5000 crores. The current NAV (Net Asset Value) of this fund is Rs 36.27 as of March 2025.
There are many small cap funds in the mutual funds market but this fund positioned itself as the best small cap fund. The reason of this is its benchmark beating returns where it outperformed Nifty Small Cap 250 TRI by 3 percent. These results reflect its strong investing strategy and expert fund management.
When talking about its investing strategy, lets explore it with more clarity.
Investment Strategy of Tata Small Cap Fund?
Tata small cap scheme past results make investors think about how it invests to deliver consistent growth. Well, the answer is that the Tata small cap fund invests 65% of its assets in small-cap stocks. By investing a higher percentage in small-cap stocks, it aims to achieve higher returns.
It also makes sure to invest only in quality stocks because this is how the fund can build big returns. For this, it took the help of a bottom-up strategy to analyse different companies. Based on great performance and valuation, it selects quality stocks that can make higher returns in future.
The Tata small cap fund regular growth scheme not only focuses on growth but also tries to reduce the risk as much as possible. This is why it spreads your portfolio into 58 different stocks. Because your portfolio is diversified into many stocks, it reduces the risk and the fund does not need to depend on one stock for growth.
Now, lets see some key benefits of investing in this fund.
Benefits of Investing in Tata Small Cap Fund
If you are planning to invest in the Tata small cap fund, you get many benefits that will make your investment more profitable:
High Returns
If you are investing for retirement or to achieve any goal, you can build high returns for your future. This is because the fund invests in small cap companies that high higher chances to grow in future. When these companies grow, it will also boost your returns.
Easy to Start Small
If you like to invest a small amount at set times which will not disturb your budget, then this fund will help you. You can start investing in this fund with an SIP plan. This plan helps you to invest small amounts regularly without worrying about budget.
Better Risk Management
Small cap market moves a lot but this fund risk management ability makes it stand out. It spreads your portfolio into different sectors which helps to reduce the risk. This is why the fund is able to show less volatility compared to its benchmark.
This time to look at the person who has the biggest contribution to this fund's growth.
Who Manages Tata Small Cap Fund?
The brain behind the Tata small cap fund regular growth is Chandraprakash Padiyar. He brings 21 years of strong experience in research and fund management. He joined Tata Mutual Fund in 2018 and holds the position of senior fund manager. As of February 2025, he manages an AUM (asset under management) of Rs. 8883 crores worth of assets.
The great thing about Chandraprakash is that he has been managing the fund from its beginning. It means he knows how to manage portfolios in tough market conditions. The proof of this is the 2020 market crash when the small cap market was facing huge losses. His experience in the fund helped to recover losses in a very short time.
Over time, he earned a strong name in the mutual funds market. His ability to reduce risk makes investors to invest in the fund.
Now lets see why you should invest in this fund:
Why Choose Tata Small Cap Fund?
You might be thinking why you should invest in Tata small cap fund when there are so many options out there. Well, these reasons are the answer:
Strong Past Performance
If you are thinking about why to invest in this fund then you should take a look at its past performance. This fund outperformed its Nifty small cap benchmark by 3 percent but also showed lower risk compared to its category.
Great Portfolio Management
This fund focus to reduce the risk as much as possible by spreading your portfolio into 58 stocks. This helps to reduce the risk because your investment is part of different sectors. Even when any sector struggles to perform, it will not affect your portfolio.
Long-Term Wealth Creation
If you are planning to invest in small cap fund so you can build a strong return for the future, then you should invest in this fund. It helps you to invest with a SIP plan where you can grow your money in the long term by investing a small amount regularly.
After reading this article, its time to move to the final part of this article.
Final Thoughts
To conclude, if you are looking for a fund that helps you to benefit small cap stocks high growth potential while managing the risk, then investing in this fund is a great choice. Its investing strategy and Chandraprakash expertise will help you to make investment profitable. You can also start an SIP in this scheme where you can invest a fixed amount at set times. Even if the market faces any challenges, it will help you to reduce the risk of big losses.
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