If you are into investments, even new to it, you must have come across the term market capitalization, and smallcap is one such market capitalization category. This is the third and last category of the entire market capitalization which starts from the stocks ranked 251^st and onwards as per market cap. Here in this article, will cover a mutual fund that mostly invest in smallcap and the fund is Uti SmallCap Fund – Direct Growth Plan. 

We will be covering all the intricate details of the fund that you must know if you are interested in investing in small-cap funds. From the fund’s objective to the process of investing in it, everything will be covered in this article.

UTI SmallCap Fund Direct-Growth Fund Management and Objectives

UTI SmallCap Fund Direct-Growth invests in the equity and equity related instruments of the companies which mainly belongs to the smallcap category. The objective of this fund is to generate wealth over time. 

UTI SmallCap Fund Direct Plan-Growth is managed by – 

• Ankit Agarwal: He has been managing the fund since 2020. Before joining UTI Mutual Fund, he was working with Centrum Capital as the Senior VP, then he was into wealth and investment management at Barclays as Assistant VP. Prior to that, he had worked at esteemed organizations such as Lehman Brothers, BNP Paribas, and others. He holds a Bachelors in Technology in Computer Science and Engineering, and post-graduation in Finance and also did Economics Management Course.  
• Nitin Jain: He has been managing the fund since 2024. He was associated with SBI Mutual Fund before joining UTI MF. He holds a BE degree and also, he is also an MMS. 

Excited about investing in the UTI SmallCap Fund? Open a free Demat account today!

How Does the UTI SmallCap Fund Work?

Uti SmallCap Fund Direct works based on market capitalization-based allocation. The fund managers pick the most promising small-cap stocks and invest the funds in them. This fund usually outperforms when the markets are moving upwards, as small-cap companies perform better during the bull run in the market. During sluggish market conditions, small-cap funds tend to offer volatile returns. Thus, investing in the small-cap funds must be done with a long-term perspective. 

Performance and Returns (As of 23 May 2025) 

UTI SmallCap Fund Direct-Growth is a bit new in the market. Thus, only three years of data are available. Here is the snapshot of the returns generated by the fund during different tenures in these three years – 

Time Frame	UTI SmallCap Fund Direct-Growth (%)	Category Average
6 Month	-2.62	-2.48
3 Month	9.39	11.28
1 Month	3.58	3.67
1 Day	0.07	0.51
YTD	-7.15	-6.55
1 Year	13.54	6.58
3 Year	22.42	24.70

From the above performance, nothing concrete can be determined. However, it seems the fund is performing better in the long run. 

Investment Allocation (As of 30 April 2025)

The UTI SmallCap Fund Growth has 95.53% equity and equity related instruments, while 0.02% is debt instruments, and 4.45% is cash and cash equivalents. 

Market cap-wise asset allocation 

• Large Cap – 1.12%
• Mid-cap – 54.84%
• Small-cap – 44.04%

As of 30 April 2025, the fund had an average market cap of ₹13432 crore, and it spans

across 87 stocks. The top 10 holdings make up 20.35% of its assets. 

Sectoral Allocation 

The fund invests across sectors, offering a well-diversified portfolio. Here are the top five sectors as of 30 April 2025 – 

Sectors	Allocation (%)
Industrials	20.29
Financial Services	16.90
Materials	15.04
Healthcare	13.52
Consumer Discretionary	12.88

Stock-wise Allocation 

The top five stocks of the UTI SmallCap Fund include – 

Stocks	Assets (%)
MCX	2.99
City Union Bank	2.19
Navin Fluorine	2.14
Karur Vysya Bank	2.14
Aster Dm Health	1.93

Key Metrics 

As of 30 April 2025, the fund had an expense ratio of 0.71%, which is bit higher than the category average of 0.65%.

Fund Details	Information
AUM (Assets Under Management)	₹4238 Crore as of 30 April 2025
Category	Equity Fund, open-ended
Fund Manager	Ankit Agarwal, Nitin Jain
Exit Load	1% if redeemed within 365 days
Entry Load	Nil
Minimum Investment	₹5000 (Lump sum)₹500 (SIP)
Benchmark	Nifty Smallcap 250 TRI

The UTI SmallCap Fund NAV as of 23 May 2025 stood at ₹26.5465.

Risk and Performance of the UTI SmallCap Fund 

This fund is classified as a ‘Very High Risk’ fund. It usually offers a higher return but also possesses higher risk. 

1. Standard Deviation (Std Dev% %): It shows how much the returns vary from the average returns generated by the funds themselves. The higher this number, the more it fluctuates.

The Standard deviation for the fund is 17.58%, while that of the category is 17.90%, making the fund little bit less volatile than its peers.

2. Beta: This ratio indicates the volatility of the fund’s performance, compared to similar funds in the market. The lower the Beta, the more predictable the returns are, and vice versa. It helps in comparing funds. 

The fund has 0.84% as beta, while that of the category is 0.86%.

3. Sharpe Ratio: This ratio indicates the return you get for the risk you’re taking. A higher number means better risk-adjusted returns.

The fund has 0.62% while the category average is 0.71%. It indicates poorer risk-adjusted profits.

4. Sortino Ratio: It is similar to Sharpe but only looks at downside risk (the risk of losing money).

The fund has 0.87% while the category average is 1%.  

5. Alpha: It measures the extra return the fund gives above the market’s average return.

The fund has 0.52%, and the category average is 1.90%, indicating that the fund has less chance of offering market-beating returns.  

Taxation for UTI SmallCap Fund 

If you’re investing in the UTI SmallCap Fund, here’s how your returns will be taxed:

1. Short-Term Gains – If you sell the fund units within 1 year of the date of investment, a 20% tax will be levied on the entire return generated during the period. 
2. Long-Term Gains – If you sell the fund units after one year, any profit generated over and above ₹1.25 lakh will be taxable at a 12.5% rate. The same rate will be applicable for any investment tenure above 1 year. 

So, the longer you hold your investments, the better returns you can expect and the less the effect of taxes!

3. Taxes on Dividends – Dividends earned, if any, will be taxable in the hands of investors as per their tax slabs. If the dividend income surpasses ₹10000 in a financial year, then the fund house will deduct 10% TDS before disbursing the dividend into the account of the investor. 

Minimum Investment and Lock-in Period

The minimum investment amount in the UTI SmallCap Fund is ₹5000 for lump sum and SIP, which is ₹500. There is no lock-in period for the UTI SmallCap Fund Direct-Growth.

How to Invest in UTI SmallCap Fund Direct?

You can invest in the UTI SmallCap Fund – Direct Growth plan with Shoonya. 

Shoonya offers a free Demat account,  Zero brokerage trading, advanced trading tools, 100+ technical indicators, and much more!

Investing in Lump Sum Mutual Funds through the Shoonya Web Platform

Here’s a quick guide on how to invest in lump sum mutual funds through the Shoonya web platform:

1. First, you must log in to your Shoonya account at https://trade.shoonya.com From the “Orders” section, click on “MF order.”
2. Search for the fund you wish to invest in; in this case, the UTI SmallCap Fund – Direct Growth plan.
3. Choose “Fresh” for a new investment and enter the amount you want to invest.
4. You can complete your purchase by clicking the “Purchase” button.
5. You will receive a payment link on your registered email. Use the link to make the payment.

After payment, your mutual fund units will be allotted to your Demat account within T+2 days.

Note: You can only make the payment using the bank account registered with your Demat account.

Setting Up an SIP for Mutual Funds

If you prefer a Systematic Investment Plan (SIP) for UTI SmallCap Fund Direct Plan-Growth plan, you must follow these steps:

1. First, you need to log in to your Shoonya account at https://trade.shoonya.com Go to “Orders” and click on “XSIP.”
2. Find the mutual fund for which you want to set up an SIP. In this case, the UTI SmallCap Fund – Direct Growth plan.
3. If this is your first SIP with Shoonya, you need to create a Mandate ID. 

For that, you must enter the mandate amount and the validity date (until you want to keep your SIP active).

4. You must submit the details, and you’ll receive a Mandate authentication link via email. Approval generally takes 24 hours.

Once your Mandate is approved, you can follow these steps to set up your SIP:

1. Go to “XSIP,” enter the SIP amount, and select “Fresh” as the transaction type.
2. Choose the date when the SIP will be debited directly from your registered bank.
3. The approved Mandate ID will auto-reflect.
4. Choose “Monthly” for monthly debits and specify the number of installments (e.g., 24 installments for a 2-year SIP).

If you do not want to forget your SIPs and invest systematically, the SIP method can be most suitable for you. 

Why Invest in the UTI SmallCap Fund?

The reasons for investing in the UTI SmallCap Fund Direct-Growth can be – 

• Long-term capital accumulation – wealth building
• Well-diversified portfolio across sectors

Suitability of this Fund| Who Should Invest?

The UTI SmallCap Fund Direct is suitable for investors who:

• Are Risk takers
• Looking for long-term capital appreciation 
• Can stay invested for at least seven years 

Conclusion

To conclude, UTI SmallCap Fund can be suitable for investors who are looking for higher returns but also ready to take higher risk for the same. Also, the fund need long term commitment for long-term capital appreciation. So, before investing in the fund, you must consider all the aspects and see whether it fits into your investment portfolio or not and accordingly invest.  

UTI SmallCap Fund Direct Plan-Growth| FAQs

Source: ValueResearch

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.