ICICI Pru Smallcap Fund – Direct Growth

The ICICI Prudential Small Cap Fund is a diversified equity scheme launched on 18th October 2007 by ICICI Prudential Mutual Fund.

The scheme distributes the majority of its investments across the auto components, retailing, industrial products, healthcare services, finance, consumer durables, chemical and petrochemicals, and pharmaceutical and biotechnology sectors. Harish Bihani manages the scheme.

The scheme’s investment objective is to achieve long-term capital appreciation by investing primarily in equity and equity-related securities of small-cap companies. The scheme aims to achieve its objective by selecting stocks with strong business fundamentals, a favourable industry structure, management quality, sensitivity to economic conditions, a solid financial standing, and key drivers of earnings growth.

The ICICI Prudential Small Cap Fund allocates between 70% to 90% of its corpus to small-cap companies. It can invest between 30% to 10% of its assets in mid-cap stocks for strategic allocation and liquidity purposes. Small-cap companies are those which are ranked 251st and below based on market capitalisation.

Pros & Cons

How to invest in ICICI Prudential Small Cap Fund?

5paisa makes it simple and convenient for users to invest in the ICICI Prudential Small Cap Fund Direct-Growth. The procedure is straightforward, can be finished quickly, and does not include any paperwork at any point. Invest a few minutes in carrying out the steps listed below:

Step 1: Log in to your 5Paisa Account. If you do not have one, click the link to register and create a new 5Paisa account in 3 easy steps. Alternatively, you can download the 5Paisa app on your smartphone for Android or IOS and log in from your device.

Step 2: Search for the ICICI Prudential Mutual FundMutual Fund scheme that you want to invest in

Step 3: Select the option that is apt for your requirement and risk appetite

Step 4: Select the investment type – SIP (Systematic Investment Plan) or Lumpsum

Step 5: Input the amount that you’d like to invest and proceed with payment by clicking on the ‘Invest Now’ button

That’s it! This sums up the investment process. Once your payment is successful, you can see the ICICI Prudential Mutual Fund Mutual Fund reflected in your 5Paisa account in 3-4 working days. If you have selected the SIP option, the chosen amount will get deducted every month starting from the date you have made the payment.

What is the expense ratio of the ICICI Prudential Small Cap Fund?

When referring to the ICICI Prudential Small Cap Fund Direct-Growth or any other mutual fund, the word “Expense Ratio” refers to the fund’s annual operating expenses as a percentage of its total assets, which can impact a scheme’s returns for investors. A lower expense ratio usually means the fund is less costly and may generate higher returns for the investors.

Who should invest in ICICI Prudential Small Cap Fund?

The ICICI Prudential Small Cap Fund is ideal for individuals looking to achieve long-term capital growth through investments in equity and equity-linked securities of small cap companies. This fund is also suitable for those willing to take on a higher risk to balance a generally conservative investment portfolio and accept the volatility of the underlying portfolio in pursuit of higher returns compared to other diversified equity funds.

Due to its consistent performance, the ICICI Prudential Small Cap Fund has gained recognition as a trustworthy investment option within the small cap fund category. Since its inception, the scheme has shown an impressive average yearly growth rate of approximately 16.6% as measured by its Compound Annual Growth Rate (CAGR).

The ICICI Prudential Small Cap Fund is appropriate for individuals with a long-term investment outlook of at least 5 years and comfortable with high-risk levels. Conversely, this scheme may not be suitable for those who prefer low-risk investments or have a low tolerance for risk.

What are the benefits of investing in the ICICI Prudential Small Cap Fund?

● The ICICI Prudential Small Cap Fund has demonstrated strong performance, with a CAGR of around 16.6% since its establishment, surpassing its benchmark and the average for its category.
● The scheme boasts a higher alpha than its benchmark, the NIFTY Small Cap 250 TRI, and the average of its category, reflecting its superior performance compared to its peers.
● The ICICI Prudential Small Cap Fund invests in undervalued companies with temporarily low earnings and low price-to-earnings ratios based on their normal earnings power, offering the potential for growth as earnings recover.
● It also invests in companies with a higher return on invested capital compared to their cost of capital, indicating a higher potential for growth over the long term.
● Typically, small cap stocks have lower foreign portfolio investment (FPI) holdings than large cap stocks. An increase in FPI interest in small cap stocks can lead to a rapid appreciation in the value of the scheme.