ET OnlineFollowing the footsteps of DSP Mutual Fund and SBI Mutual Fund, Nippon India Mutual Fund today reopened lumpsum subscriptions in Nippon Small Cap Fund after a gap of two years. According to mutual fund advisors, many mutual fund houses are likely to reopen their small cap schemes for investments due to the attractive valuations available in the small cap space after the recent fall in the stock market.
“Notice is hereby given that Nippon India Mutual Fund (“NIMF”)/ Nippon Life India Asset Management Limited (“NAM India”) has decided to withdraw/remove existing limits on subscription of units in Nippon India Small Cap Fund. Accordingly, the following shall be applicable with effect from April 03, 2020 till further notice,” said the fund house.
Back in 2018, the fund house had put up an addendum saying, “The limit on subscriptions of units has been done with a view that increasing the size of the corpus of the scheme may prove detrimental to existing unitholders of the scheme.”
In the past week, two other small cap schemes, which were shut for lumpsum investments, have decided to open the schemes again. DSP Small Cap Fund and SBI Small Cap Fund had stopped allowing one-time investments when the market was touching historical highs in 2018.
“We feel there's a lot of opportunity in small cap space. Risk-reward is turning favourable for small caps. Historically sharp corrections create a platform for a strong rebound in the long run. The current market phase is very similar to 2013 wherein we have seen significant correction in the Small Cap stocks over the past 18 months or so. Hence given the current valuation and anticipated growth rebound we expect the Small Caps to potentially outperform over the next 3 years or so,” says Samir Rachh, Fund Manager, Nippon Small Cap Fund.
The fund house also informed that fresh/ additional subscriptions/switch-ins will be allowed/ accepted for any amount subject to the minimum application amount as mentioned in the scheme information document and key information memorandum of the scheme.
“Notice is hereby given that Nippon India Mutual Fund (“NIMF”)/ Nippon Life India Asset Management Limited (“NAM India”) has decided to withdraw/remove existing limits on subscription of units in Nippon India Small Cap Fund. Accordingly, the following shall be applicable with effect from April 03, 2020 till further notice,” said the fund house.
Back in 2018, the fund house had put up an addendum saying, “The limit on subscriptions of units has been done with a view that increasing the size of the corpus of the scheme may prove detrimental to existing unitholders of the scheme.”
In the past week, two other small cap schemes, which were shut for lumpsum investments, have decided to open the schemes again. DSP Small Cap Fund and SBI Small Cap Fund had stopped allowing one-time investments when the market was touching historical highs in 2018.
“We feel there's a lot of opportunity in small cap space. Risk-reward is turning favourable for small caps. Historically sharp corrections create a platform for a strong rebound in the long run. The current market phase is very similar to 2013 wherein we have seen significant correction in the Small Cap stocks over the past 18 months or so. Hence given the current valuation and anticipated growth rebound we expect the Small Caps to potentially outperform over the next 3 years or so,” says Samir Rachh, Fund Manager, Nippon Small Cap Fund.
The fund house also informed that fresh/ additional subscriptions/switch-ins will be allowed/ accepted for any amount subject to the minimum application amount as mentioned in the scheme information document and key information memorandum of the scheme.
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