Small cap funds are equity mutual funds that invest chiefly in stocks of small cap companies. These are companies that are listed 251 and beyond (in terms of market capitalization) on recognized stock exchanges. Typically, small cap companies tend to offer higher long-term growth potential than mid or large caps but also come with significant volatility.

To tap into the growth potential of small caps while mitigating risk, the investment strategy of Bajaj Finserv Small Cap Fund rests on five pillars, as follows:

Emphasis on quality

Investments in companies with healthy core business metrics such as consistent earnings and sustainable competitive advantages.

Eye on growth

Targeting companies with a long-term vision and long runway for growth backed by sustainable models.

Undervalued opportunities

Focus on fundamentally strong companies that are trading below their intrinsic value due to temporary mispricing or market sentiment disconnect.

Leadership

Emphasis on emerging category leaders and companies dominating niche segments or having high market shares in microsegments.

Governance

Prioritising transparent practices, aligned promoter interest and seasoned management.

Bajaj Finserv Small Cap Fund: Regular and direct plans

When you invest in the Bajaj Finserv Small Cap Fund, you can choose between two types of plans: Direct Plan and Regular Plan. Both follow the same investment strategy, but the investment route and cost will differ.

Regular plan

You can invest in the fund through a registered mutual fund distributor who will assist you with the application process. To compensate for these services, the expense ratio of regular plans is slightly higher. However, the distributor can guide you with selecting a suitable fund, investment amount, duration etc. in line with your goals and risk tolerance levels. They also help you with all transactions.

Direct plan

Investors who prefer to make and manage their investments independently can invest directly with the asset management company under the direct plan. Since there are no commission costs, the expense ratio for the direct plan is relatively lower, which can result in slightly higher net returns over time.

How to invest in Bajaj Finserv Small Cap Fund

You can invest in the Bajaj Finserv Small Cap either online or offline, directly with Bajaj Finserv AMC or through a registered mutual fund distributor.

To invest online, click on the ‘Invest Now’ button on this page. You will be redirected to the investor portal.

To invest offline, you will need to fill out an application form and submit it independently or through a distributor at any official point of contact (OPAT) of the AMC.

Taxation on Bajaj Finserv Small Cap Fund

Bajaj Finserv Small Cap Fund is taxed as an equity mutual fund. The following tax rates apply:

Short-term capital gains (STCG):If you redeem your units within 12 months of purchase, any profits are classified as short-term capital gains and taxed at 20%, along with applicable surcharge and cess.

Long-term capital gains (LTCG):For units held for more invested than a year, a long-term capital gains tax is applicable upon redemption. Gains of up to Rs. 1.25 lakh in a financial year are exempt from tax. Thereon, gains are taxed at 12.5%, plus surcharge and cess as applicable.