A TAILOR-MADE INVESTMENT

Giving investors the freedom to make their portfolio according to their needs, smallcases offer a middle ground between mutual funds and stocks.

- Pranit Sarda

Sharat Khurana, the 46-year-old former CFO of InMobi and FreeCharge, has been making investments for about 18 years now, and began investing directly in equities around eight years ago. Today, while a part of his money is invested by a wealth manager, he invests a part of it personally. Although he had a demat account with Kotak Securities for several years, Khurana recently moved to online broking firm Zerodha. Even more recently, he started investing in smallcases.

Khurana, who heard of smallcases from his colleagues, bought his first smallcase early this year by investing ₹50,000 in a ‘Low Risk-Smart Beta’ portfolio that will help him earn passive returns on large-cap stocks. “From sign-up to pulling the trigger, I bought my first smallcase in less than 5 minutes,” says Khurana, who has invested ₹1 lakh in smallcases and plans to invest more.

THE PRODUCT

Smallcases are portfolios of stocks or exchange traded funds (ETFs) that are selected, created and weighted to reflect an idea, theme or strategy. While mutual fund portfolios are also built around themes, an investor in smallcases holds shares in their portfolio as against units. “The idea is to get retail investors to take a portfolio-based approach while investing in stocks, versus thinking about individual stocks,” says Vasanth Kamath, co-founder and CEO of smallcase, a platform where brokerages as well as Sebi-registered research analysts, investment advisors, portfolio managers and asset management companies create diversified portfolios for investors.