DBS Chola rolls out small-cap fund

DBS Chola Mutual Fund on Tuesday launched its small-cap fund that will predominantly invest in equities of companies with small market capitalisation (m-cap).

Small-cap companies, as defined by the fund's objectives, are those whose m-cap falls between the highest and lowest constituents of the BSE Small Cap Index. The closed-ended fund will invest at least 65 per cent of its assets in stocks of small companies.

While choosing stocks, the fund will look at capable management, attractive business models, pricing flexibility, valuations and potential value for unlocking of the companies, according to a company executive. The fund is benchmarked to the BSE Small Cap Index.

"We believe substantial opportunities exist in small-cap markets. Using our extensive research capabilities, we believe we can offer potentially superior returns with acceptable levels of risk," said R Rajagopal, chief investment officer, DBS Chola Mutual fund.

The new fund offer opens on November 20 and closes on December 20.