Smallcase | A better alternative to Mutual Funds

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Smallcase | A better alternative to Mutual Funds

Smallcase, a new age investment advisor, has taken the equity investors by a storm off late.

There have been multiple reasons attributing to the success of these advisory services.

Primary being cost-efficient, better performance, ease of execution, and control of investment.

The other major reason which contributed is the gross underperformance of competing investment options like mutual funds.]

In this blog, I will discuss why and how it makes more sense to look at these new-age advisory platforms for investment in the equity market compared to mutual funds.

In the last fast five months, there has been an influx of equity investors. Various stockbrokers in the country have opened more than 35 lakhs DMAT account.

The Problem – Mutual fund (Performance)

The primary reason has been the underperformance of mutual funds in the last 3 to 5 years. To give you perspective Largecap funds have provided a 5.2% return during the previous five years, and in the last three years, the return has further come down to 2.8%.

There has been no denying that most new investors have joined the mutual fund in the last five years. The number of investors account (Folio) ballooned from 4.03 crore to 8.71 crores by Dec 2019.

Mutual fund Folio

The majority of them have been new and first-time investors in the Equity market through mutual funds.

New investors coming has also led to the ballooning of the assets managed by mutual funds from 10.8 lakh crore in March 2015 to more than 22 lakh crores in March 2020.

mutual fund growth

These investors have not received the return, which perceived risk-free return has delivered Bank fixed deposits.

COVID and also accentuated the outflow from the mutual funds and greater traction to the equity market. There was ample free time that investors used to monitor their finances sitting at home.

The economic situation has forced many to move to efficient and performing platforms to save and grow their wealth.

A better alternative – “SMALLCASE.”

Like small cases, new-age platforms made much sense to investors who tested Mutual funds as investment vehicles and did not get the desired returns.

Smallcase is an investment vehicle with all the properties and benefits of a Mutual fund minus mutual fund disadvantages like cost, ownership, and simple to understand.

Let’s see one by one to understand better…

Fewer expenses compared to Mutual funds.

The mutual funds will have expenses that are recurring in nature and range from anything between 0.5% to 2.5% yearly. The active funds will have higher costs compared to a passive mutual fund scheme like INDEX funds.

In small cases, the expenses are charged only at the transaction time in the form of brokerage while buying or selling part or full portfolio. If you don’t modify your portfolio for ten years, then you need not pay any charges.

It will make a massive difference in the result or maturity value in the longer run.

Discount brokers like ZERODHA or UPSTOX don’t charge investors for delivery transactions in the Equity market. This will further bring down the cost for investors.

You are the owner of the portfolio.

In a mutual fund, the portfolio’s stock selection and weightage are governed by the fund manager of respective mutual fund companies.

Contrary, Smallcase will only suggest a model portfolio based on the themes you have chosen. Individuals can increase or decrease any particular stock in a personal portfolio according to his understanding.

Dividend in your account

Investors received dividends directly in the bank account for all equity investors. Mutual fund investors do not receive the dividend form portfolio company directly.

Dividends received from mutual funds and Stocks have difference.

In mutual funds, your holding’s value will come down by the extent of the quantum of money received by the investor, ex-Dividend distribution tax.

Whereas the dividend received by investors of Equity investors, the capital appreciation in stocks has nothing to do with the dividend declared by the company.

High Liquidity

According to your understanding, the stocks you are holding in your Demat account can be liquidated either fully or partially.

Whereas In a mutual fund, all open-ended funds will have a minimum of 1-year exit load period, withdrawal before that will cost investor 1 percent of withdrawal value.

The value of withdrawal is known to investors at the time of selling in equity Shares, whereas in mutual funds, value is known only at the end of the day.

Better returns

According to, the company’s advised portfolio has performed better than the same category mutual fund schemes.

In the long run, it makes much sense to look at the “Smallcase” portfolio as the low cost will impact compounding in the long term positively.

How to buy ?

Currently there are nine stock brokers with whome Smallcase have tied up.

Small case

In case you are having account with any of the following brokers you can avail the facility.

Few of the Popular themes investor can buy through Smallcase are following

Smallcase theme

The conclusion

Those looking to take control of their equity investment should look at the new age advisory platforms and their offering.

New and mature investors alike can go for a flexible, efficient, and low-cost small-case.

No investor can shy away from Equity investment to meet their financial goals. The model portfolio offered by “Smallcase” gives an alternative to investment vehicles like Mutual funds.

Some of INDIA’s best research and articulate model portfolios for a small case.

Do visit their website and comment below what you like and whatnot.

This Post Has 3 Comments

  1. bedava

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