Smallcases are a collection of securities based on a single strategy, sector, or idea. They are created & managed by SEBI registered professionals.
The concept of a Smallcase is to provide investors with direct access to ready-made portfolios rather than through mutual funds. The firm has a lot of smallcases.
Brokerage and transaction fees apply because investing in a smallcase is comparable to trading. In addition, a minimal registration fee of INR 100-150 must be paid.
It is a form of financial vehicle that invests in securities such as stocks, bonds, money market instruments, and other assets by pooling money from multiple investors.
You invest in monetary instruments including stocks, bonds & other securities as an investor. You can acquire them directly or via mutual funds.
Here are the differences between smallcase and mutual fund to understand mutual funds vs smallcase.
Since the stocks are held in the investor's Demat Account, smallcase investing allows for greater investment control.
Mutual funds, on the other side, provide good diversification for a small investment. Based on its investing aim, a mutual fund can engage in more than 100 firms.
In contrast to mutual funds, Smallcase demands a larger investment size. To build a portfolio, one must purchase each unit, which is similar to investing directly in shares.
Smallcases are an option for investors who have the necessary knowledge to run their own portfolio. Otherwise, mutual funds are a better option.