Edelweiss Small Cap Fund

Diversified

Equity

India Micro Cap

Others

Small Cap

Aggressive growth Investor Profile

Investor Profile

1–7 yearsInvestment Horizon

HNI, UHNI, Retail Investor, Mass AffluentTarget Segments

SEBI registered equity mutual fund suitable for all investor categoriesRegulatory Fit

Edelweiss Small Cap Fund Growth invests in smaller Indian companies for higher growth potential with higher risk.

What This Strategy Does

Edelweiss Small Cap Reg Gr is an equity small-cap fund which captures India's emerging small business opportunity through a quantitative stock selection approach, deploying capital across industrials, financials, and consumer cyclicals to achieve broad-based earnings growth.

CW Expert Research Notes

Consistent Outperformance

The fund has outperformed its benchmark in 5 out of the past 12 years, demonstrating resilient earnings delivery and downside protection characteristics.

Mid-Cap Tilt

With a 67.3% allocation to mid-cap stocks, the fund's portfolio construction expresses conviction in the mid-cap segment, differentiating it from peers.

Earnings Revisions Catalyst

The fund could benefit from a potential catalyst of positive earnings revisions across its holdings in the consumer cyclical and financial services sectors.

Performance and Risk Analysis

Historical returns, volatility patterns, and how this fund has performed relative to its benchmark.

Fund Performance

1.9% AnnuallyAlpha

+23.1% vs +10.6% benchmarkSince Inception

+14.0% vs +6.3% benchmark3Y Annualized

+16.1% vs +6.5% benchmark5Y Annualized

Edelweiss Small Cap Fund

Benchmark Index

Benchmark Performance Comparison

Edelweiss Small Cap Fund

NIFTY 50

Risk Profile

Standard Deviation19.4%

Maximum Drawdown-21.4% | Oct 2024

Sharpe Ratio0.04

Beta0.81

Upside Capture80%

Detailed Risks

Market Risk

Prolonged economic slowdown could dampen consumer demand, impacting small-cap earnings.

Liquidity Risk

Volatility spikes or redemptions may impair small-cap liquidity, hindering rebalancing.

Concentration Risk

Concentrated small-cap exposure amplifies idiosyncratic risks like earnings misses.

Specific Strategy Risk

Regulatory changes targeting specific sectors could disproportionately impact holdings.

Strategy Details

A closer look at the investment thesis, portfolio construction, and current holdings.

Core Investment Theme

Provides exposure to India's entrepreneurial energy before institutional capital discovers it. Small caps offer the highest growth potential but demand patience through volatility cycles. The long-term impact is dramatic wealth creation—historical data shows sustained small-cap investing has generated life-changing returns, but requires conviction to stay invested through sharp drawdowns. Suitable for investors with a long time horizon and risk appetite to withstand elevated volatility.

Broader Market View

Market Outlook

Equity markets appear to be entering a mid-cycle phase, with consumption and earnings recovery gaining traction. This normalization backdrop, supported by trends like reviving capex and credit growth, offers an attractive entry point. However, risks such as margin pressures and cyclicality in sectors like consumer discretionary and industrials warrant a balanced approach.

Why This Strategy is Attractive Now

The strategy seems well-positioned to capitalize on the current environment through its diversified exposure across consumer, financial, and technology sectors. The portfolio's holdings in market leaders combined with a flexible, risk-adjusted approach appears aligned with the mid-cycle dynamics. With around 70 holdings, the strategy stands to benefit from its balanced mix of growth and defensive names.

Investment Style & Process

Investment Style

The portfolio exhibits characteristics of a Quality Growth approach, emphasizing companies with durable competitive advantages, consistent earnings growth, and reasonable valuations relative to their long-term potential.

Why it Makes Sense

In the current environment of moderating economic growth and elevated uncertainty, a Quality Growth strategy can offer a compelling combination of resilience and upside participation, balancing defensive attributes with exposure to secular growth opportunities.

High-Level Investment Process

Sourcing: The strategy appears to focus on companies with strong franchises, sustainable competitive moats, and attractive growth runways, sourced through rigorous fundamental research and industry expertise. Selection: The selection process suggests a preference for businesses with proven execution capabilities, pricing power, and the ability to compound earnings and cash flows through cycles. Construction: Portfolio construction is consistent with a focus on risk-adjusted returns, emphasizing prudent diversification across sectors and individual positions to manage volatility.

Portfolio Holdings Overview

SectoralAllocation

Technology4.63%

Energy & Infra1.91%

Financial Services26.57%

Consumers21.16%

Services15.13%

Capital Goods30.6%

Geographic Allocation

Domestic100%

Top Stock Holdings

CompanySectorAllocation

Clearing Corporation Of India Ltd.Utilities3.60%

Multi Commodity Exchange of India LtdFinancial Services3.50%

City Union Bank LtdFinancial Services3.41%

Karur Vysya Bank LtdFinancial Services2.72%

KEI Industries LtdCapital Goods2.27%

Ajanta Pharma LtdServices2.13%

Radico Khaitan LtdConsumers2.12%

Indian BankFinancial Services2.08%

PNB Housing Finance LtdFinancial Services2.05%

UNO Minda LtdConsumers2.00%

Fund House Management

The asset management company’s track record, AUM scale, and fund manager credentials.

Fund Manager Track Record

Trideep Bhattacharya

Mr. Trideep Bhattacharya has experience of 17 years. Manages 89 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹23,943 Cr Holds a MBA degree.

41 years

Combined Team Experience

₹ 69,560 Cr

Assets Under Management

Raj Koradia

Co-Portfolio Manager

Mr. Raj Koradia has experience of 9 years. Manages 65 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹23,450 Cr Holds a B.Com degree.

Dhruv Bhatia

Co-Portfolio Manager

Mr. Dhruv Bhatia has experience of 14 years. Manages 30 funds at Edelweiss Asset Management Limited with an AUM of approximately ₹22,167 Cr Holds a PGDM degree.

CW Expert Take

Edelweiss brings capital markets expertise to fund management. Their investment teams leverage deep sectoral knowledge from the parent group's domain experience. The fund house combines fundamental research with market structure understanding, useful across equity positioning and credit cycle navigation.

Firm Overview

Total AUM₹1,80,658.3 Cr

Investment Philosophy & Approach

Disciplined Approach

Edelweiss employs a disciplined, research-driven investment approach focused on long-term capital appreciation.

Risk Management

The fund house emphasizes rigorous risk management through diversification and adherence to mandates.

Experienced Team

Investment decisions are made by an experienced team following a structured process.

Operational & Regulatory Details

What it costs to invest, transaction mechanics, and regulatory disclosures you should know.

Costs and Fees

Total Expense Ratio (TER)2.13%

Exit Load1

Regulatory & Tax Information

INF754K01JJ4

ISIN

DailyDealing Frequency

Nifty Smallcap 250 TR INRBenchmark

LTCG | >1Year 12.5%% on gain above 1.25 Lakh

STCG | <1Year 20%%

Tax Implications (India)