Abakkus Mutual Fund to launch Abakkus Small Cap Fund; NFO opens Feb 26, closes on Mar 12

Abakkus Mutual Fund on February 20 announced the launch of the Abakkus Small Cap Fund, an open-ended equity scheme designed for investors looking to participate in India’s emerging small-cap growth stories. The New Fund Offer (NFO) will open on February 26 and close on March 12.

For investors with a long-term horizon and higher risk appetite, the fund aims to capture capital appreciation by investing predominantly in small-cap companies — defined by SEBI as those ranked 251st and beyond in terms of full market capitalisation.

Allocation and investment framework

The scheme will allocate 65% to 100% of its portfolio to equity and equity-related instruments of small-cap companies. Up to 35% may be invested in debt securities and up to 35% in money market instruments, providing limited flexibility to manage liquidity and volatility. The fund may also invest up to 10% in units of InvITs.

The equity basket can include instruments such as convertible debentures, equity warrants, convertible preference shares, equity derivatives, and units of REITs.

The investment approach will follow a bottom-up stock selection strategy, focusing on company fundamentals rather than sector-wide themes. The fund management team will prioritise strong balance sheets, earnings visibility, scalable business models, and disciplined position sizing — a critical element in managing risk in the small-cap segment.

Growth-oriented positioning

The fund will benchmark its performance against the NIFTY SmallCap 250 Total Return Index (TRI), offering investors exposure to a broad universe of small-cap companies.

The portfolio may selectively focus on structurally emerging sectors such as Electronics Manufacturing Services (EMS), defence and aerospace value chains, applied material sciences, outsourced semiconductor assembly and testing (OSAT), and travel, leisure and hospitality — areas aligned with India’s manufacturing push and domestic consumption growth.

Risk and suitability

The scheme is classified as “Very High” risk, reflecting the inherent volatility, liquidity constraints and price swings associated with small-cap investing. Small-cap stocks can generate outsized returns during favourable market cycles but may also witness sharper corrections during downturns.

The minimum investment amount during the NFO is ₹500, with subsequent investments allowed in multiples of Re 1. The scheme will be available under both direct and regular plans.

Sanjay Doshi, Head of Investments and Research at Abakkus Mutual Fund, will manage the scheme.

Who should consider it?

This fund may be suitable for investors who:

Have a long-term investment horizon (5–7 years or more)

Can tolerate high volatility

Seek exposure to high-growth, under-researched companies

Want to diversify beyond large- and mid-cap allocations

Abakkus Mutual Fund, sponsored by Abakkus Asset Manager Private Limited and registered with SEBI, has advised investors to review scheme-related documents carefully. As with all equity mutual funds, returns are market-linked and not guaranteed.

For investors willing to navigate short-term fluctuations, the Abakkus Small Cap Fund offers a structured route to participate in India’s evolving small-cap opportunity landscape.