Mirae Asset Small Cap Fund – Direct (G): NFO Details

Investment Objective and Strategy

Objective:

The investment objective of the scheme is to generate capital appreciation by investing predominantly in small cap stocks. From time to time, the fund manager will also seek participation in other equity and equity related securities to achieve optimal portfolio construction.  

There is no assurance that the investment objective of the Scheme will be achieved.

Investment Strategy:

The investment strategy of the Mirae Asset Small Cap Fund - Direct (G) revolves around identifying and investing primarily in small-cap companies with strong growth potential. The fund employs a bottom-up stock-picking approach, focusing on companies with robust business models, sound financials, competitive advantages, and scalability. It aims to construct a diversified portfolio across sectors to manage risk while capitalizing on opportunities in emerging businesses. The strategy emphasizes long-term wealth creation, supported by thorough research and a disciplined investment process.

Why Invest in Mirae Asset Small Cap Fund – Direct (G)?

Investing in Mirae Asset Small Cap Fund – Direct (G) offers the potential for significant long-term capital appreciation by targeting high-growth small-cap companies. The fund benefits from Mirae Asset's robust research and disciplined stock selection approach, ensuring a well-diversified portfolio with high growth potential. Its direct plan has lower expense ratios, enhancing returns over time. Ideal for investors with a long-term horizon and a high-risk tolerance, the fund provides exposure to promising businesses in India's growing small-cap segment.

This scheme is suitable for investors with a high-risk appetite and a long-term investment horizon, as small-cap stocks tend to be more volatile. The fund follows a research-driven approach to stock selection, leveraging Mirae Asset’s expertise in identifying promising opportunities in the small-cap segment. The "Direct Growth" plan ensures lower expense ratios compared to regular plans, maximizing returns for investors over the long term.

Strength and Risks – Mirae Asset Small Cap Fund – Direct (G)

Strengths:

The key strengths of Mirae Asset Small Cap Fund – Direct (G) include:

Strong Research-Driven Approach: Backed by Mirae Asset’s extensive research capabilities, the fund identifies high-quality small-cap companies with strong growth potential and robust fundamentals.

Experienced Fund Management: Managed by skilled professionals with a proven track record in equity investing and small-cap stock selection.

Diversified Portfolio: The fund maintains a well-diversified portfolio across sectors, reducing the impact of sector-specific risks.

Long-Term Wealth Creation: Focuses on businesses with scalability and sustainable growth, aiming to deliver significant long-term returns.

Low Expense Ratio: As a direct plan, it offers a lower expense ratio compared to regular plans, improving cost efficiency for investors.

Consistency and Risk Management: Balances high-growth opportunities with disciplined risk management to navigate small-cap market volatility effectively.

Risks:

Investing in Mirae Asset Small Cap Fund – Direct (G) comes with certain risks, including:

Market Volatility: Small-cap stocks are inherently more volatile than large-cap or mid-cap stocks, leading to significant price fluctuations.

Liquidity Risk: Small-cap stocks may have lower trading volumes, making it difficult to buy or sell large quantities without affecting prices.

Economic and Sectoral Risks: Small-cap companies are more sensitive to economic downturns, regulatory changes, and sector-specific issues, which can impact their performance.

High Risk, High Reward: The fund is designed for investors with a high-risk appetite, as it may underperform during bearish market phases or periods of heightened market uncertainty.

Concentration Risk: Despite diversification, overexposure to specific sectors or stocks can lead to concentrated risks in certain market scenarios.

Long-Term Commitment Required: Due to the volatility and growth nature of small-cap investments, the fund is more suited for long-term investors, and short-term investors may face potential losses.

Investors should assess their risk tolerance and investment horizon before considering this fund.