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Understanding smallcase: A new way to invest in India

The financial markets have changed a lot over the years, and now there are plenty of alternatives for investors based on their objectives and preferences.

If you’re a retail investor looking for an easy way to participate in the stock market, smallcase is a great option. For those looking to invest in a particular theme, strategy, or objective, it is a convenient one-stop destination.

When it comes to investing, smallcases are an emerging concept, especially in India’s stock market and today we will discuss its ins and outs. Let’s begin!

What is a smallcase?

A smallcase is an investing strategy or theme-based basket of equities. Smallcases are contemporary financial solutions that assist you in creating a diverse, long-term, and cost-effective portfolio.

Smallcase provides a selection of pre-built portfolios, or “smallcases” to differentiate itself from mutual funds and other conventional ways to manage a portfolio. Every smallcase represents a different strategy, concept, or theme via its carefully curated basket of equities or ETFs. 

They are overseen and selected with attention by the SEBI-registered in-house research team or professional partners of smallcase.

The underlying assets are stored directly in the investors’ demat accounts, and they may purchase an entire smallcase at once. With smallcases, investors may have exposure to particular industries, approaches, or ideas via theme-based investing.

For instance, Equity & Gold Smallcase might be a good investment to diversify your investments into stocks and gold and balance the portfolio. 

How does smallcase investment work?

Now that we have understood the concept of smallcase, let’s have a look at how it functions. 

Theme-based investments:

For example, Digital Inclusion is an example of a smallcase that revolves around a particular investing theme like Indian businesses that are at the forefront of the digital revolution. Depending on the theme, each smallcase invests in different sets of equities with various weights or exchange-traded funds (ETFs).

Research-driven method: 

Professionals and experts analyse the market for promising investment possibilities within specific themes. When building the smallcases, they consider several aspects, including market outlooks, company principles, and market developments.

Transparent arrangement: 

Investors can inspect the exact stocks or ETFs that constitute each smallcase portfolio. Because of this openness, investors may choose investments that suit their risk tolerance and long-term objectives.

Flexible configuration: 

Investors may tailor smallcases to their liking, even if they are pre-constructed portfolios. The smallcase may be customised to meet their personal needs by adding or removing stocks or ETFs.

Investment with a single click: 

Upon selecting a smallcase, investors may invest with only one click. Everything is taken care of by the smallcase platform, which performs transactions and distributes the necessary amount across the stocks or ETFs that make up the smallcase.

How to invest in smallcase?

  • Create an account: First, sign up for the smallcase account. Fill out the registration form with the required information.
  • Determine your objectives for the investment: It is crucial to think about your investing objectives, risk appetite, and time horizon. Using this information, you may choose the best smallcase for your requirements.
  • Browse smallcases: Go through all the different kinds of smallcases on the platform. You may find comprehensive details on the theme, components, and performance history of each smallcase in the related documentation.
  • Tap on a smallcase to get more information: If you’ve found one that fits your investing objectives, make sure it satisfies your needs by analysing its composition, performance history, and related research.
  • Deposit funds into the smallcase: Examine the specifics of the final order and verify the investment. The platform is liable for allocating funds and executing the transactions.
  • Rebalance as required: Maintain tabs on your assets and check in on your portfolio’s progress occasionally. If you want your smallcase to keep performing as predicted and help you reach your financial objectives, you need to monitor it closely.  

Smallcase vs mutual funds

AspectSmallcaseMutual funds
Investor’s influenceInvestors may manage their smallcase and make changes to their stocks.No direct influence; fund manager oversees selections.
Diversity of investmentsCurated collections of stocks and sectors.Wide-ranging investments across various sectors and classes.
Initial investmentMore accessible entry points, some without a minimum.Typically requires a larger initial investment.
Management costsGenerally more cost-effective.This incurs additional costs for management and operations.
OwnershipStocks are owned directly in an investor’s demat account.Here, ownership is represented by units in the mutual fund.
Redemption chargesThere are rarely any charges for selling holdings.Charges may apply when withdrawing investments.
Fluctuations in returnsYou may notice significant swings in smallcase returns due to specific stock performance.Generally smoother return rates due to spreading out risk.
Risk profilePotentially higher due to focused investment.Generally lower, benefiting from broad diversification.


Smallcases are a new and interesting way to invest, especially for Indian investors. They allow you to invest in a basket of stocks or ETFs focused on a particular theme or strategy. However, making an informed and well-rounded decision is essential to a successful investment, whether it is smallcase or mutual funds. 


Is smallcase a good investment? 

Smallcase investments offer a unique approach to the Indian stock market, allowing investors to buy curated portfolios based on themes or strategies. They provide a level of control and transparency that mutual funds may not, as investors own the individual stocks in their demat account. However, like any investment, smallcases come with risks and are subject to market fluctuations. They can be a good investment if they align with your investment goals and risk tolerance.

Is Smallcase good for long term? 

Smallcase can be suitable for long-term investments, especially if the chosen smallcase aligns with long-term trends or sectors poised for growth. The platform offers various smallcases designed with a long-term perspective in mind, focusing on themes that could potentially offer sustained growth over time. However, it’s crucial to conduct thorough research and consider the smallcase’s past performance and the underlying assets’ potential before investing.

Is smallcase SEBI approved? 

Yes, smallcases are created and managed by SEBI-registered professionals. The platform itself is not directly regulated by SEBI, but the investment professionals who curate the smallcases adhere to regulatory guidelines. This ensures that the smallcases are created with a level of oversight and in compliance with investment regulations in India.

Is there any disadvantages in investing in smallcase? 

Investing in smallcases has its disadvantages. They can lead to a concentrated portfolio if not diversified properly, which increases the risk if a few stocks perform poorly. Smallcases also require active management, as investors need to decide when to rebalance or exit, which can incur transaction costs and tax implications. Additionally, the performance of smallcases can be volatile, reflecting the risks associated with equity investments.

Why should I invest in smallcases? 

Investing in smallcases can be appealing for several reasons. They offer a diversified portfolio through a single transaction, which can mitigate individual stock volatility. Smallcases are transparent, allowing investors to see exactly which stocks they own. They also provide the flexibility to modify the portfolio according to personal preferences. Moreover, smallcases cater to various investment themes, enabling investors to align their portfolios with specific trends or sectors they believe in.

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