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JP Morgan India Smaller Companies Fund


JP Morgan Mutual Fund has launched its second equity fund, JP Morgan India Smaller Companies Fund. This open-ended, equity fund aims to generate long term capital appreciation from a portfolio that is substantially constituted of stocks of smaller companies. The focus will be on companies constituting the bottom fourth by way of market capitalization of stocks listed on the NSE / BSE.

Scheme Details
Issue Opens: November 9, 2007
Issue Closes: November 30, 2007
Type: Open-end, equity scheme
Benchmark Index: CNX MidCap
Minimum Investment: Rs 5000
Load Structure: The fund will levy an entry load of 2.25 per cent for investment of less than Rs 5 crore. An exit load of 1 per cent would be charged if the investment is redeemed within six months from the date of allotment.

Performance History: Fund Manager
Harshad Patwardhan is the designated fund manager for the scheme. He has around 13 years of experience in the equity markets. Prior to joining JP Morgan Asset Management he worked for 2 years with Deutsche Equities India Private Limited as a Senior Research Analyst. He has also worked with several foreign brokerage houses covering a variety of sectors.
Mr Patwardhan is currently managing JP Morgan India Equity Fund which is a Rs 1,150 crore diversified equity fund. This fund has delivered the return of 40.62 per cent (as on November 26, 2007) since its launch in May 2007.

Performance History: JP Morgan
JP Morgan AMC started its operation in the year 2007. Currently they are managing assets worth Rs. 2,163 crores. JP Morgan India Smaller Companies Fund is the second equity offering by the fund house. There is not much to say about the performance of the funds as they have a brief performance history.
Currently, the AMC has only three funds in its kitty: JP Morgan India Liquid Plus, JP Morgan India Liquid and JP Morgan India Equity.

Opinion
Funds focusing upon stocks of smaller companies may be suitable for those investors who do not mind taking higher risk in pursuit of out-performance. Currently, a lot of mid- and small-cap focused funds with proven credentials are available to investors. In our opinion, they should be given preference vis-à-vis this latest offering.

Performance delivered by funds of similar peer group:

      Returns  
Fund  Launch Date  3 Months  6 Months  1 Year
DSPML Micro Cap Reg Fund May-07 27.20  -  -
DSPML Small And Mid Cap Reg Oct-06 31.18 28.09 36.05
Franklin India Smaller Companies Dec-05 23.73 27.10 33.37
JM Small & Mid-Cap Reg Apr-07 33.83 38.78  -
Principal Junior Cap Jun-05 40.67 38.61 53.61
Sundaram BNP Paribas S.M.I.L.E. Jan-05 54.43 58.37 64.41
Sundaram BNP Paribas Select Small Cap Jan-07 27.06 24.48  -
Return as on November 26, 2007