Smallcase offers a better experience, but know the risks (2024)

FAQs

Is smallcase actually good? ›

Though smallcases look better in terms of costs and returns, they come with a prerequisite of market knowledge. And investors who have the requisite knowledge to manage their own portfolio can consider investing in smallcases. Else they are better off investing in mutual funds.

Smallcases are usually themed and limited to 10–15 stocks. Some argue that this can lead to overly concentrated portfolios. Concentration risk occurs when a few stocks determine the fate of your entire portfolio.

You have complete knowledge about where your money has been invested in, and are given complete control over these investments. The stocks and ETFs bought through smallcase would be credited to your broker demat account, thereby giving you full control over your investments.

Smallcases may have the potential to achieve better returns than mutual funds and ETFs; however, these returns are not guaranteed. There is always a risk involved in investing in the stock market, and smallcases are no different.

Smallcases are a great way to invest in the market; however, it is not insulated from the risks in the market. All you have to do is observe what style and theme fit your goal.

Mutual funds offer professional management, making them suitable for those seeking a well-rounded investment approach. On the other hand, smallcases offer thematic investing, transparency, and lower costs, catering to investors looking for focused exposure and more control over their portfolios.

smallcase is backed by Rainmatter Capital, which in turn is backed by Zerodha, which also incubated the startup.

smallcases are created by SEBI-registered entities like Investment Advisors & Research Analysts.

Smallcase portfolios are highly concentrated portfolios, while mutual funds by nature believe in diversification, that is investing in more securities, not less as in smallcase portfolios. Therefore smallcase portfolios may give more returns, but they will be far more volatile than mutual funds of similar nature.

smallcases are model portfolios of stocks/ETFs based on a theme, idea or strategy. It is a modern investment instrument for investors to build long term diversified portfolios.

Is smallcase good for long term? ›

Smallcases can be used for both short-term and long-term investments, depending on their strategy. However, they are typically designed with a longer-term perspective in mind, enabling investors to capitalize on specific market trends and themes over time.

smallcases are modern investment products based on specific themes or strategies. These smallcases are beginner-friendly and provide diversified exposure to the stock market. You can choose smallcases that align with your investment objectives and risk appetite.

Fee-based smallcases require a subscription fee to access their underlying constituents. The subscription fee is based on the plan duration, which can be monthly, quarterly, or annually, and is determined by the smallcase manager.

So, if you want to start investing in equities through SIP, smallcase can be a great platform to begin your journey. With proper research, analysis, and a disciplined approach, SIPs in smallcase can potentially help you achieve your financial goals.

Mutual funds offer professional management, making them suitable for those seeking a well-rounded investment approach. On the other hand, smallcases offer thematic investing, transparency, and lower costs, catering to investors looking for focused exposure and more control over their portfolios.

smallcases are created by SEBI-registered entities like Investment Advisors & Research Analysts.