Introduction
In 2025, if you are looking to build strong wealth by giving your portfolio a chance in small cap funds, then Tata Small Cap Fund should be your first go-to choice.
The fund has shown an annual growth rate of 21.23% in the last 5 years. It is an open-ended equity scheme started by Tata Mutual Fund in 2018. The fund focuses on investing in small cap stocks to make higher returns for investors. As you know, what position Tata holds in the Indian market and the same thing it doing in the mutual funds market.
Although Tata AMC has a wide range of investment options, its small cap scheme stands out as a top performer. In the last few years, the fund has outperformed its benchmark and delivered the best value. This is the reason why the fund holds a top 10 position in the small-cap category.
In this article, you will get a detailed breakthrough of the Tata small cap scheme. You will cover its investing strategy, benefits and how starting an SIP in the fund can boost your returns. Let's dive deep into it.
What is Tata Small Cap Fund?
Tata small cap scheme is an equity scheme started by Tata Mutual Fund which is the oldest asset management company in India. The fund's primary focus is to provide higher returns and deliver long-term wealth. Its past results show that the fund is perfectly doing what it promises to investors. To make higher returns, the fund leverages the growth of small-cap stocks. It focuses on investing in growing small-sized companies that have the potential to become mid-cap tomorrow. These companies' market value is between Rs.1000-5000 crores.
By investing in these companies, the Tata small cap fund aims to deliver higher returns. If you look at the NAV (Net Asset Value) of Tata small cap schemes, it is Rs.33.67 as of February 2025. The fund has been in the mutual funds for the last 7 years but its growth surprised many investors. Because the fund focuses on investing in small-cap stocks that are highly volatile, it targets investors who can take enough risks.
Investment Strategy of Tata Small Cap Fund
The Tata small cap fund regular growth highly priorities investors' growth and long-term results. This is why it focuses on strategies that help to achieve their goals. It follows a growth-oriented strategy to invest in quality stocks. Here is a detailed breakdown of the fund's investing strategy:
- Bottom-Up Stock Selection - The fund analyses every company's performance, growth potential and business model. This helps to choose the right stocks that have high growth potential.
- Portfolio Diversification - To reduce the risk, the fund smartly spreads its portfolio into different sectors. It helps the fund to maintain performance in the long term.
- Active Management - Instead of relying on a passive strategy, the fund uses active management for higher growth. A team of experts actively adjust the portfolio to adapt growth opportunities.
This strategy of investing helps the fund to ensure growth while managing the risk. After using this strategy, the fund gained the trust of many investors and outperformed its benchmark.
Who Manages Tata Small Cap Fund?
The Person who is managing the Tata small cap fund is Chandraprakash Padiyar. He brings 21 years of strong experience in research and fund management. He joined Tata Mutual Fund since 2018 and holds the position of senior fund manager. As of February 2025, he controls an AUM (asset under management) of Rs. 8883 crores worth of assets.
If you look at Chandraprakash's educational background, he has an MBA and CFA in finance. Before joining Tata Mutual Fund, he also served UTI Mutual Fund and Alchemy Capital Management.
From the day of inception, he is managing the Tata small cap regular growth and helping to achieve higher growth in the market. He focuses on a strong investing strategy to make high returns from small-cap stocks. He uses bottom-up stock selection to identify the right stocks for long-term profitability. He priorities factors like past performance, growth potential and business style to pick the profitable stocks. He also diversification strategy to reduce the risk and make better returns.
This strategy of investment helped thousands of investors to grow their money. His strong investment approach and mutual funds knowledge are the reasons why the fund is holding a top 10 position in the small cap category.
Why Investing in Tata Small Cap Fund SIP is Good?
As you know, starting an SIP (Systematic Investment Plan) is one of the best ways to make great returns. But have you thought of why starting a systematic plan in the Tata small cap scheme is beneficial for you? Here are the reasons:
- Higher Compounding Benefits
Compounding is one of the biggest factors to grow systematic plan investment. Because the fund focuses on long-term investments, you can hold your systematic investment for a long time. This helps you to leverage higher compounding benefits and grow your money over time.
- Reduce Market Risk
If you want to leverage small-cap funds growth but hesitate to invest due to its market risk, then starting a systematic plan is a great choice for you. You can reduce the market timing risk by investing a fixed amount at set times.
- Affordable Investment
As you know, the fund aims to provide higher returns in the long term. If you do not have a large sum of money to invest, then you can still generate growth by investing a fixed amount through a systematic plan.
Who Should Invest in Tata Small Cap Fund?
Over time, the fund has gained popularity but due to its higher volatile nature, the fund is more suitable for investors who are:
- High-Risk Takers
The fund invests in small companies that face higher volatility in their performance. This factor sometimes causes bad short-term performance. If you want to make high returns and take enough risk, then investing can be a good decision.
- Long-Term Investors
If you are an investor who is looking to invest for 5-10 years, then the fund is the right choice for you. It focuses on small company stocks that have higher growth potential but also require time to generate great returns.
- Diversification Seekers
As an investor, if you want your portfolio to get diversified into different sectors, then the Tata small cap scheme is a good investment. It systematically diversifies your portfolio so you can generate growth with lower risk.
A Final Note
To conclude, the Tata small cap scheme is a great investment choice for high-return seekers. Its effective investing strategy and great performance makes it a top performer in the small-cap category. It also helps you to start an SIP plan where you invest a fixed amount at set times and your money grows consistently.
By providing a systematic plan and high growth potential, the fund created a huge difference in the market. If you want to grow your investment by taking risks, then the Tata small cap fund is a perfect investment for you.
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