What Is Smallcase and How Does It Work?

Smallcases infuse a portfolio-driven approach to investing; individual stock units will be credited to your demat account once you make a purchase. This is not the case with respect to a mutual fund, where you gain access to the aggregated fund alone and not the underlying companies.

What this also means is that when you invest in a Smallcase, you become a part-owner in every stock that is in the portfolio of your chosen Smallcase, and you are eligible for dividend and other rights assured to shareholders.

The cost of investing in Smallcases may be comparable to investing in mutual funds, and different Smallcases have different expense ratios as per the RIA (Registered Investment Advisor) handling the portfolio. However, no exit load applied on Smallcase redemptions. Every charge applicable to stock trading is applicable to Smallcases too.

Smallcases are like liquid stock, with no concept of lock-in periods. They are a way of investing that offers more flexibility and choice, while still being liquid. The lack of lock-in periods means Smallcase investors can get out at any time without losing their entire investment in case it doesn’t work out as planned. Another primary advantage of Smallcases is that you get the services of a qualified RIA for the price of a mutual fund investment.

Moreover, Smallcases facilitate the easy purchase of thematic investments; you can buy a theme or idea as a bundle, like investing in global tech leaders or companies benefiting from rising rural consumption, instead of buying each company’s share one piece at a time.

Smallcases are the perfect solution for those who want to diversify their investments without taking on too much risk. They provide low minimum investment amounts and well-rounded theme-based asset classes as affordable investment options that don’t break your bank account!

How does Smallcase work?

Getting started in investing through Smallcases mirrors that of investing in the stock market in general. This means that if you have a demat account, you’re good to go (Or you may open one through an RIA on SmallCase too). All-in-all, this process is very similar to investing in direct stocks – so a few correlations can be drawn. These are as follows:

• To use Smallcases, you need to pay a one-time signup fee of Rs 100+GST
• You can make a one-time, lumpsum investment in Smallcases or make periodic monthly SIPs as you go.
• Trading and transaction fees, stamp duty as well as brokerage levies applicable are identical to those of typical stock investments.
• Smallcases are subject to the same clearing and settlement rules of direct stocks; if you buy a Smallcase today, money will be debited immediately and stocks will be credited after the standard T+2 interval (Trading day + 2 days).
• Smallcases can be bought and sold like stocks during market hours; there is no lock-in period or exit load.
• You can directly sign-in to Smallcase through your existing online broking account, they should have a tie-up with SmallCase.

Needless to say, when it comes to investments one size just doesn’t fit all. We must evaluate our reasons to buy assets, the returns we hope to generate, and the amount of time we are mentally prepared to wait it out for. This is also why Smallcases can be a neat addition to your existing portfolio. They give you access to verified, professional portfolio management services at a fraction of the cost of the legacy service.

Teji Mandi is a means to access quality Smallcases – we have 2 portfolios on offer for now – Flagship and Multiplier – that cater to your goal-based needs. Gain access to “Affordable PMS” – Start with as low as Rs149/month and embark on your investment journey today.