Nippon India Mutual Fund Revises Subscription Limits for Small Cap Fund: What Investors Need to Know

Nippon India Mutual Fund has announced significant revisions to the subscription limits for its popular Nippon India Small Cap Fund, effective from August 16, 2024. These changes are set to impact new investors looking to enter the fund through Systematic Investment Plans (SIPs) or Systematic Transfer Plans (STPs).

Key Changes in Subscription Limits

Previously, the fund imposed an investment limit of Rs 50,000 per day per PAN for new SIP or STP registrations. Under the new rules, this limit will now apply on a per-transaction or per-installment basis, rather than daily. This change offers investors more flexibility in how they allocate their funds, allowing for greater precision in managing investments.

In addition to this, a monthly overall cap of Rs 11,50,000 per PAN has been introduced across all frequencies. This means that investors must be more strategic about their investments, as exceeding this limit will no longer be possible.

It’s important to note that these changes will not affect existing SIPs or STPs registered before the effective date. Investors who already have ongoing plans can continue with their current investment strategy without any alterations.

A Glance at Nippon India Small Cap Fund

The Nippon India Small Cap Fund, an open-ended equity scheme, primarily focuses on small-cap stocks. Launched on September 16, 2010, the fund has a well-established track record, managed by the experienced Samir Rachh. Its benchmark index is the Nifty Smallcap 250 TRI, a measure of the performance of the small-cap segment of the Indian stock market.

As of the latest update, the fund holds 95.93% of its investments in domestic equities, with a diversified portfolio comprising 6.88% in large-cap stocks, 11.61% in mid-cap stocks, and a substantial 52.94% in small-cap stocks. This allocation underscores the fund’s commitment to capturing the growth potential of small-cap companies.

Stellar Performance Since Inception

The performance of the Nippon India Small Cap Fund has been nothing short of remarkable. Since its inception, the fund has delivered an absolute return of 1,621.79%, translating to an impressive annualized return of 22.69%. Over the past decade, the fund has consistently outperformed its peers, with an annualized return of 24.75%, significantly higher than the category average of 19.93%.

Current Fund Metrics

As of August 13, 2024, the fund’s size stands at a robust Rs 60,372.55 crore, reflecting its popularity among investors. The Net Asset Value (NAV) is currently Rs 172.17, with an expense ratio of 1.43%. The fund’s Assets Under Management (AUM) have grown exponentially, from Rs 8,524.70 crore in December 2019 to Rs 60,372.55 crore in July 2024, highlighting the confidence that investors have in this small-cap fund.

What This Means for Investors

For existing investors, the changes in subscription limits should have no immediate impact. However, for new investors, the revised limits require careful planning, especially for those looking to make substantial investments through SIPs or STPs. The new monthly cap of Rs 11,50,000 per PAN is particularly noteworthy, as it necessitates a more disciplined approach to fund allocation.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.