🧾 Bajaj Finserv Small Cap Fund – NFO Review
- Jai prakash
- Jun 27
- 4 min read
NFO Period: 27th June 2025 to 11th July 2025Category: Equity – Small Cap Fund Type: Open-ended Equity Scheme Benchmark: BSE 250 SmallCap TRI
Introduction
Bajaj Finserv Mutual Fund has launched its new offering — Bajaj Finserv Small Cap Fund, with the New Fund Offer (NFO) open from 27th June to 11th July 2025. The scheme aims to generate long-term capital appreciation by investing primarily in equity and equity-related instruments of small cap companies.
Small caps are often considered the growth engine of the future — but they come with higher volatility and risk. Let’s review the scheme in detail to assess its suitability for investors.
Investment Objective
The fund seeks to provide long-term capital appreciation by investing in companies ranked 251st and below by full market capitalization, as per SEBI’s small cap definition. The strategy follows a bottom-up stock selection approach with flexibility to allocate tactically outside the small cap universe.
Note: There is no assurance that the investment objective will be achieved.
Key Features
Fund Type: Open-ended equity scheme investing in small caps
Minimum Investment: ₹500 and in multiples of ₹1 thereafter
Plans: Regular and Direct
Options: Growth and IDCW
SIP Availability: Daily, Weekly, Monthly, Quarterly
Exit Load: 1% if redeemed/switched within 6 months (after 10% of units)
Asset Allocation Strategy
65%–100% in equity and equity-related instruments of small cap companies
Up to 35% in:
Mid and large cap companies
Debt and money market instruments
REITs and InvITs (max 10%)
Foreign securities including overseas ETFs (max 25%)
The scheme offers both core small cap exposure and diversification flexibility through satellite allocations.
Market Outlook – Is This the Right Time?
While equity markets, including small caps, are currently trading at elevated levels, long-term investors can use volatility to their advantage. Systematic investing strategies like SIPs or STPs are highly recommended in the current environment.
India's economic momentum, capex revival, and growing investor participation continue to support the long-term potential of small cap equities.
Who Should Invest?
This fund may be suitable for:
Investors with a long-term horizon (minimum 5–7 years)
Those comfortable with market fluctuations and volatility
Investors looking to diversify into emerging businesses with high growth potential
This fund may not be suitable for:
Short-term investors
Risk-averse individuals
Investors needing regular income or capital protection
Key Differentiators of Bajaj Finserv Small Cap Fund
True-to-label small cap focus as per SEBI categorization
Tactical flexibility through exposure to debt, REITs, and overseas markets
Modern SIP features:
SIP Top-Up
SIP Pause
Wealth SIP with SWP
STP & SWP options
Backed by Bajaj Finserv’s brand and regulated investment process
Pros & Considerations
Strengths:
Access to potential wealth creators in the small cap segment
Multiple investment options and cash flow planning tools
Compliant structure and investor-centric features
Points to Consider:
New fund with no past performance data
Suitable only for investors with high risk appetite
Potential for high short-term volatility
Performance Comparison: Leading Small cap funds
Here is the performance of some existing Small cap funds. This would give an idea to investors on how these funds have performed in medium to long term. Returns indicated here are annualized returns.
📊 Small Cap Funds – Regular Plan Comparison
Fund Name (Regular Plan) | 1-Year Return (%) | 3-Year CAGR (%) | 5-Year CAGR (%) |
Bandhan Small Cap Fund | 17.0% | 31.1% | 38.0% |
Quant Small Cap Fund | 3.1% | 27.4% | 46.6% |
Tata Small Cap Fund | 6.3% | 22.3% | 36.2% |
HDFC Small Cap Fund | 2.0% | 21.8% | 35.2% |
Invesco India Smallcap Fund | 5.5% | 24.3% | 38.0% |
Franklin India Smaller Companies Fund | 4.7% | 23.2% | 37.1% |
HSBC Small Cap Fund | 1.9% | 19.8% | 34.8% |
LIC MF Small Cap Fund | 3.9% | 19.6% | 32.0% |
Nippon India Small Cap Fund | 3.2% | 22.0% | 39.0% |
Bank of India Small Cap Fund | 7.0% | 20.4% | 36.5% |
*Returns shown above are as on 20 Jun, 2025
📊 NFO Key Details
Feature | Details |
NFO Opens | 27th June 2025 |
NFO Closes | 11th July 2025 |
Scheme Reopens | Within 5 business days from allotment |
Minimum Investment | ₹500 (and in multiples of ₹1 thereafter) |
SIP Options | Daily, Weekly, Monthly, Quarterly |
Exit Load | 1% if redeemed within 6 months (after 10% free units) |
Riskometer | Very High (both scheme and benchmark) |
Plans Available | Regular & Direct |
Options | Growth, IDCW (Payout/Reinvestment/Transfer) |
Conclusion
The Bajaj Finserv Small Cap Fund presents a compelling option for investors seeking long-term capital appreciation through the small cap space. The fund combines disciplined asset allocation with modern investment tools to support structured, goal-oriented investing.
As always, investors should evaluate their own financial goals, time horizon, and risk profile before making any investment decision.
⚠️ Disclaimer
Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor for personalized recommendations.
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*Investors should consult their financial advisors if in doubt about whether the product is suitable for them Note: The above information has been sourced from the Scheme Information Document provided by Bajaj Finserv AMC. Read the entire document before investing, Disclaimer: Jaiprakash (ARN/Distributor - 70524; brand name Vasundhra Investment) is the distributor of the mutual fund. Please consult your investment advisor before investing
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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