PGIM Small Cap Fund NFO launched


PGIM Mutual Fund is coming out with a NFO in the form of PGIM Small Cap Fund.

PGIM Small Cap Fund as the name suggests, would be a small cap fund.

The fund would be open for subscription from July 09, 2021 to July 23, 2021.


pgim mutual fund

NFO details for PGIM Small Cap Fund

Scheme Opens


Scheme Closes


Fund Manager

Mr. Aniruddha Naha

Mr. Kumaresh Ramakrishnan

Mr. Ravi Adukia


Nifty Small Cap 100 TRI

Minimum Investment


Fund Category

Small Cap



PGIM Small Cap Fund would be an open - ended small cap fund that would be predominantly investing in equity and equity related instruments of small cap companies.


PGIM Small Cap Fund Exit Load

10% of the total units allotted can be redeemed/switched out to debt schemes or PGIM Arbitrage Fund without any exit load within 90 days from date of allotment.

0.50% for units in excess of the above that are switched or redeemed within 90 days from date of allotment.

Nil, if the units are redeemed or switched out after 90 days from units of allotment.


Additional reading: Click Here to read why you should not invest based on past returns

PGIM Small Cap Fund Investment Objectives

The investment objective of the fund is to attain long term growth and capital appreciation by investing predominantly in equity and equity related instruments of small cap companies.

There is no guarantee that the investment objectives of the scheme would be achieved.



PGIM Small Cap Fund Allocation

The asset allocation for the fund would be something like this

Asset Class



Equity and Equity Related instruments of Small cap companies



Equity and Equity Related instruments of other companies



Debt and Money market instruments



Units issues by REITS and InvITs




The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.



Are you investing in the right mutual funds?

What is a small cap mutual fund?

A small cap mutual fund needs to invest a minimum of 65% into small cap companies at all times.

These include all companies beyond 250 in terms of market capitalization.

A small cap mutual fund is the most risk prone mutual fund besides thematic mutual funds and yet the most rewarding if you know what you are doing.

This category includes companies that have potential to be multi baggers but also companies that are most likely to be plagued by poor numbers, inefficient management, etc. among other issues.

A small cap mutual fund allows a fund manager a very large pool of companies to choose from unlike a large and a mid cap mutual fund.

Therefore  the performance of a small cap mutual fund hinges the most on a fund manager and his ability to avoid certain companies rather than his ability to pick the right companies.

Most investors sadly who invest in a small cap mutual fund do so, either due to its high returns potential or the need to do so for diversification, don’t be one of them.


Additional reading: Click Here to read our complete review of PGIM Diversified Equity Fund 

Categorization of companies

Large Cap: 1st -100th company in terms of full market capitalization

Mid Cap: 101st -250th company in terms of full market capitalization

Small Cap: 251st company onwards in terms of full market capitalization


PGIM Small Cap Fund Investment Strategy

The fund would be investing 65% of the overall portfolio in small cap companies with the rest either being invested in small cap companies or other equity related instruments.

The primary objective of the fund is to attain long term growth and capital appreciation.

The fund can invest in other schemes of the fund house provided it does not violate any rules.

The investment strategy of the fund would be built around a top down and bottom up approach with focus on the fundamentals of a company as well as the management.

Every company beyond 251 in terms of market capitalization qualifies as a small cap stock, this means that most listed companies are small cap stocks.

Small cap stocks are the most diversified of all, both in terms of sector as well as number of companies.


Are you investing in the right mutual funds?

Should you invest in a small cap fund?

You can consider a small cap fund if you satisfy the following conditions:

If you have a time horizon of 7 years or more, this is because small caps go through various phases and cycles before which you get any meaningful returns which is why patience and discipline is paramount.

If you have the calmness to stay put during volatile times which is a given with small cap funds and not panic and redeem at the first sign of volatility.

If you want to supplement your core portfolio and diversify your portfolio.

A small cap fund should not be your core portfolio or the only fund in your mutual fund portfolio or take up a major portion of your portfolio.

A small cap fund should work as if you are garnishing a dish and should never be your main course.




“Industry consolidation is more pronounced in the areas where the small caps operate because most small-cap companies compete with the unorganized players. In order to capture quality investment opportunities, we have launched the PGIM India Small Cap Fund. Idea is to help investors gain exposure to business segments like construction, textiles, real estate, chemicals and agrochemicals, industrials, paper and the like that find limited representation in the large-cap space.” - Ajit Menon, CEO, PGIM India Mutual Fund





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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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