The Hindu Business Line : Sundaram BNP Paribas Mutual launches select small-cap fund

Sundaram BNP Paribas Mutual will launch Sundaram BNP Paribas Select Small Cap to invest in select small cap stocks. The new fund offer will open on January 10 and close on January 24 or on collection of Rs 300 crore, whichever is earlier, an official release said.

The investment objective is to generate consistent long-term returns by mainly investing in equity and equity-related instruments of small-cap companies with a market cap of less than Rs 5,000 crore. The fund will be benchmarked against the BSE Small-Cap Index.

The fund is a five-year close-ended equity scheme allowing redemptions up to 10 per cent of corpus every year. It offers two investment options namely dividend and growth option.

"Small cap companies are likely to be the biggest beneficiaries of the long term India story. As they graduate to mid cap status over a period of time, wealth creation will peak in percentage terms," said Mr N. Prasad, Chief Investment Officer, Sundaram BNP Paribas Mutual.

The fund will allocate 65-100 per cent in equity and equity-related securities of small caps, 0-35 per cent in other equities and 0-35 per cent in fixed income and money market instruments.

The minimum application amount would be Rs 5,000.