Smallcase Investment is a relatively new concept as compared to mutual funds. Investors are drawn towards it due to the uniqueness it offers, which is theme-based investing. People often start a Systematic Investment Plan (SIP) to build their portfolio in a better way. The investor can align their objective with the theme for better analysis and information-based investing.
This article will give a step-by-step guide to investors for setting up their regular investment plans, especially for long-term growth. It will also guide you to manage your already existing SIPs.
Understanding SIP in Smallcase
Investing in a carefully chosen basket of stocks or exchange-traded funds (ETFs) that are arranged according to particular themes, industries, or strategies is known as smallcase investing.
It provides complete transparency and control over these professionally managed portfolios, which are connected to your Demat account directly. It allows retail investors to diversify easily while aligning with long-term financial goals.
Key Features:
- Curated Portfolios: Invest in sector-specific themes like IT and Pharma.
- Direct Equity Exposure: Unlike mutual funds, you own real shares in your Demat account.
- Amount: The investor can begin with flexible SIP amounts, which vary depending on the chosen smallcase.
- Frequency: The frequency is adjustable based on convenience, like weekly or monthly intervals.
Key Benefits:
- One of the main advantages is that SIP lowers market timing risk by averaging out buying prices in erratic markets.
- Promotes Financial Discipline: Automating investments helps in developing discipline with practices that increase wealth.
- Customised Portfolios: Select Smallcases according to your level of risk tolerance, whether it be conservative, balanced, or aggressive.
- Rebalancing Alerts: To keep up with market trends, the majority of Smallcases offer quarterly or semi-annual rebalancing updates.
How to Set Up a SIP in Smallcase?
Step 1: Sign in to the broker account that is connected to Smallcase
You need to have a Demat account with a supported broker to start investing in Smallcase SIPs. The following well-known brokers provide Smallcase integration:
- Zerodha
- Groww
- Upstox
- HDFC Securities
- ICICI Direct
Step 2: Use a broker or website to access Smallcase
After logging in, visit www.smallcase.com or the Smallcase section of your broker’s trading platform. You will be taken to Smallcase’s broker-linked version, which displays various theme-based portfolios, including:
- All Weather Investing: a mix of debt, gold, and stocks.
- Smart Beta is based on quantitative elements such as value or low volatility.
Step 3: Pick a Case That Fits Your Budget
Important information is displayed on every Smallcase page:
- Compounded Annual Growth Rate, or CAGR
- The minimum amount that must be invested
- ETFs or constituent stocks
- Frequency of rebalancing
- Performance in the past versus the benchmark
Step 4: Select the SIP option by clicking “Invest Now”
Click “Invest Now” once you’ve chosen a Smallcase. You’ll be given the option to select from:
- One-time Investment
- Systematic Investment Plan, or SIP
Step 5: Adjust Your SIP Configuration
Now, you can adjust your SIP settings to suit your tastes:
- SIP Amount: Depending on your ability to start with.
- Frequency: weekly, biweekly, or monthly
Step 6: Configure E-Mandate to Receive Automatic Payments
Smallcase will assist you in creating an e-mandate so that your SIP payments can be automated and completed by debit card or net banking to finish the mandate. This allows auto deduction from your account, without you manually doing it.
Step 7: Review and confirm the SIP setup:
- Verify your SIP amount, frequency, mandate, and start date one more time.
- Examine the stock composition and terms.
- To activate your SIP, click “Confirm.”
How to Manage Your SIP in Smallcase?
Managing smallcase SIPs may be confusing for some. Here is a step-by-step process that will help you in managing the same:
1. Open your SIP Dashboard
Depending on your platform, you can manage your SIP through smallcase.com or your broker’s Smallcase dashboard after it has been activated. The dashboard provides complete insight into information like:
- Future SIP dates
- Previous investments
- Performance of the portfolio as of right now
- Notifications of rebalancing
- SIP status (cancelled, paused, or active).
2. Decide When to Stop or Pause your SIP
Flexibility is one of Smallcase SIPs’ greatest benefits.
- Pause SIP: You can put your SIP on hold for a few cycles if you’re experiencing a brief financial crisis. You can start investing again later without losing your holdings because the portfolio is still intact.
- Cancel SIP: You have the option to end your SIP entirely at any moment. Unless you decide to sell them manually, your previously purchased stocks remain in your Demat account.
3. Manage Updates for Rebalancing
To stay in line with their initial plan or to take into account changes in the market, the majority of smallcases undergo periodic rebalancing, typically on a quarterly or semi-annual basis.
This is what you must do:
- A rebalance notification will be sent to you through email or displayed on your dashboard.
- Select “Review Rebalance” to view: Stocks to be added or taken out, Changes in weight, and accept the modifications to keep your Smallcase up to date.
Bottomline
The conclusion can be drawn that smallcase is a good way of investing if an investor is focused on a certain sector or theme. It offers the option of a one-time investment and a SIP. Many young investors or those who do not have excess cash in hand prefer SIP investment in smallcase.
The guide above is a good way to begin your journey of investing in smallcase after understanding the meaning and advantages associated with it. Individuals focus on the option they are choosing for investment and should analyse it thoroughly before making any decision.
