Edelweiss Asset Management on Thursday announced the launch of Edelweiss Small Cap Fund (ESCP). An open-ended scheme, predominantly investing in small-cap stocks, will open for subscription on Friday, and will close on February 1, it said in a release.

The benchmark for the fund is the Nifty Small-Cap 250 and will be managed by Harshad Patwardhan, CIO — Equities, Edelweiss Asset Management. The objective of the scheme is to generate long-term capital appreciation from a portfolio which predominantly invests in equity and equity-related securities of small-cap companies.

The fund offers a facility — Smart Trigger-enabled Plan (STeP), which helps an investor to invest in a staggered manner and mitigates market timing risk.

“This feature is available only during the NFO. Through the STeP facility, investors can spread their investment in Edelweiss Small Cap Fund in five equal monthly instalments. Under this feature, 20 per cent of the application money will be invested upfront in Edelweiss Small Cap Fund. The remaining 80 per cent will be invested in Edelweiss Liquid Fund and will switch to ESCP in four equal monthly instalments triggered by market dips,” it said.

Commenting on the launch, Radhika Gupta, CEO, Edelweiss Asset Management, said, “Investing in small-caps can be rewarding when last one-year returns are negative, but underlying earnings are picking up. We believe our experience in successfully managing our mid-cap fund over the last 10 years through bottom-up stock picking will help in identifying opportunities in the small-cap segment for our customers.”

Since small-caps are volatile, we want investors to invest systematically using the STeP facility during the NFO period which can help mitigate market timing risk, she added.

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