BOI AXA Mutual Fund has announced a new fund offering (NFO) of BOI AXA Small Cap Fund, an open-ended equity scheme that will mainly invest in small cap stocks. A company’s market capitalization is the market value of the outstanding shares of a company. Small cap companies are those that have a relatively smaller market share, i.e. according to SEBI, they are defined as the 251st company onwards in terms of market cap. The NFO period of the scheme is from November 28 to December 12, 2018. The scheme will reopen on December 27, 2018.
BOI AXA Small Cap Fund will invest 65 to 100 percent of its assets in small cap companies, whereas investment in companies other than small cap will be capped at 35 percent. The scheme may also invest in debt and money market instruments up to 35 percent. Investment in units issued by REITs and InvITs will be capped at 10 percent. The scheme will not invest in foreign securities and securitized debt.
The scheme will be benchmarked against the Nifty Smallcap 100 Total Return Index (TRI). The benchmark index includes 100 small cap stocks listed on the National Stock Exchange (NSE). Some companies in the Nifty Smallcap 100 Index are: IDFC Limited, PVR, NIIT Technologies, Delta Corp.
| Index Name | 1-yr TRI (%) | 5-yr TRI (%) |
| Nifty Smallcap 100 TRI | -28.39 | 15.94 |
*Returns data as of Oct. 31, 2018
Last month, Tata Mutual Fund launched an NFO for its Tata Small Cap Fund and Invesco Small Cap NFO was initiated by Invesco Mutual Fund. Other players in the small cap fund space are HDFC, Reliance, SBI. Five year returns for these are 22.57 percent, 30.70 percent and 32.45 percent, respectively. (As on Nov. 27, 2018)
The fund will be co-managed by Saurabh Kataria and Ajay Khandelwal. Kataria also manages the equity portion of BOI AXA Tax Advantage Fund which has given five year returns of 15.89 percent. (As on Nov. 27, 2018)
Other schemes managed by Khandelwal are BOI AXA Arbitrage Fund and BOI AXA Small & Mid Cap Equity & Debt Fund.
Key information about BOI AXA Small Cap Fund NFO:
| NFO period | November 28 – December 12, 2018 |
| Minimum application amount | Rs. 5,000 |
| Benchmark | Nifty Smallcap 100 TRI |
| Exit load | 1 percent exit load if units are redeemed or switched out within one year of allotment date |
| Fund managers | Saurabh Kataria
Ajay Khandelwal |