Are you interested in investing in stocks, or if you are currently investing, bored of stocks and mutual funds? Well, today, we have a unique and igniting idea of investing onboard!
Ideally, an investor has two ways of making money from the stock market, namely a) Do it Yourself Investing b) Allow others to manage your funds. But, smallcase Technologies has found a disruptive way of investing, oozing the essence of both the options mentioned above.
Interesting! So, tell me more about this company and its fantastic option?
smallcase Technologies is a Bengaluru-based fintech startup founded in 2015 by three friends from IIT Kharagpur, Vasanth Kamath, Anugrah Shrivastava, and Rohan Gupta. They have launched an investing platform that provides you with a professionally tailored investment plan titled “smallcase.”
Smallcase is a basket or portfolio of stocks or exchange-traded funds (ETFs) proposed by investment experts and advisors. Smallcase is formed on basis of strategy (for e.g., choosing pharma stocks during the Covid crisis), trending market theme, or choosing financial model types such as zero debt or risk profiles (whether you want risk aggressive profile or a balanced one).
Fascinating, but how can I invest in it?
To invest in smallcase, one requires a Demat and trading account, and the minimum investment one can make varies with the stocks in the portfolio. To make investing hassle free ,the company has already partnered with seasoned broking entities like Edelweiss, Zerodha, and HDFC Securities. Since investing in a smallcase is similar to trading, brokerage charges and transaction fees are applicable (in addition to a registration charge).
But it sounds similar to Mutual Funds; how is it different?
Though both options benefit from minimizing risk through diversification, smallcase has multiple benefits over it. Firstly, it is cheaper due to its less expense ratio fees. While Mutual Funds charge up to 1.5-2%, annual fees on the invested amount but smallcases charge only a nominal amount (0.2%).
Additionally, smallcase vest more transparency and control as there is no lock-in period; investors can exit any time from their investments. Moreover, you don’t need to rely on your fund manager to disclose your stocks. In smallcase, the investors have ownership rights of their portfolio stocks whereas, in mutual funds, one simply holds the portfolio units and not the stake in the company.
Though it seems to be a lucrative investment option, equity investments have much higher risk and are subject to market volatility. On the other hand, mutual funds provide a stable return of 8% to 12%, and investors need not worry about tracking the stock and market movements.
So, after knowing about this alternative investment option, let us know how are you investing? We would like to know more from you in the comments and follow Decoding Startups for more insightful content.
Content Credits - Shivani Gupta