The fund will invest primarily in stocks of small companies, which would mean currently investing predominantly in stocks with market cap of less than Rs 3,000 crore. The selection will be based on businesses with scalability as micro-caps are generally varied, not correlated to broader markets and not sector-specific. The fund may also use various derivative and hedging products and techniques to generate better returns.
It started off as a close-ended offer and was converted into an open-ended one in June 2010. Investors here are a happy lot, though they had some tense moments in 2008 as the fund got hit. However, it did not face much redemption pressure. And has rewarded its investors well since then. It steamrolled ahead in 2009 and in 2010 was the best performing one in its category.
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