UTI-Small Cap Fund – Direct Growth

The UTI-Small Cap Fund is a diversified equity scheme launched on 22nd December 2020 by UTI Mutual Fund.

The scheme distributes the majority of its investments across the financial services, capital goods, consumer durables, healthcare, IT, automobile and auto components, chemicals, and services sectors. It is managed by Ankit Agarwal.

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 investment objective by focusing on companies with scalable business models and strong potential for long-term growth.

The UTI-Small Cap Fund allocates between 65% to 80% of its corpus to small-cap companies and the remainder to mid-cap stocks. Small-cap companies are those which are ranked 251st and below based on market capitalisation.

Pros & Cons

How to invest in a UTI-Small Cap Fund?

5paisa makes it simple and convenient for users to invest in the UTI-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:

What is the expense ratio of the UTI-Small Cap Fund?

When referring to the UTI-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 a UTI-Small Cap Fund?

The UTI-Small Cap Fund is suitable for investors seeking long-term capital appreciation through investments primarily in equity and equity-related securities of small-cap companies. This scheme is also ideal for investors seeking a higher-risk strategy to balance an overall conservative portfolio construct and willing to tolerate the volatility of the underlying portfolio to achieve higher returns relative to other diversified equity funds.

The scheme has delivered approximately a 25% Compound Annual Growth Rate (CAGR) since its inception, which is a measure of the scheme’s impressive annualised growth rate over time.

The UTI-Small Cap Fund is suitable for investors with a medium to long-term investment horizon of preferably 5 years or more and very high-risk appetites. On the other hand, the scheme is unsuitable for risk-averse investors or investors looking for a low-risk investment option.

What are the benefits of investing in the UTI-Small Cap Fund?

• The UTI-Small Cap Fund has generated an impressive CAGR of approximately 25% since its inception.
• Investing in the UTI-Small Cap Fund is a good option for those seeking to benefit from the opportunities in the small-cap universe. Small-cap companies often have limited coverage on the sell side, but the scheme covers a wide range of companies in this market segment.
• The scheme follows a "bottom-up stock picking" investment strategy. This strategy allows the fund manager to focus on individual companies and their fundamentals rather than being influenced by macroeconomic factors or market trends, which can lead to potentially higher returns.
• Other benefits of investing in UTI-Small Cap Fund include its flexibility to invest in companies whose businesses may be temporarily weak or undergoing changes and hold onto mid-cap stocks that have the potential to become large-cap.
• The scheme’s bias toward high return on capital employed and strong operating cash flows suggests that it prioritises companies with efficient and profitable operations and strong cash flow generation, indicating a focus on long-term sustainability and profitability.