WhiteOak Capital Launches Its First Fund of Funds With Small-Cap Focus

Key Takeaways

• WhiteOak Capital Diversified Equity Small Cap FoF opened for subscription on September 28 and closes on October 12.
• It is WhiteOak Capital Mutual Fund's first fund of funds.
• The scheme will invest across actively managed small-cap mutual fund schemes instead of constructing a portfolio of small-cap stocks directly.

WhiteOak Capital Mutual Fund has entered the fund-of-funds segment with the launch of WhiteOak Capital Diversified Equity Small Cap FoF.

The new fund offer opened on September 28 and will remain available until October 12. The fund is structured as an open-ended fund of funds and will primarily invest in actively managed small-cap mutual fund schemes.

This means the scheme will not build its small-cap exposure principally by buying individual companies.

Instead, money will be allocated to other mutual fund schemes whose underlying portfolios are invested in small-cap stocks.

WhiteOak said the fund intends to spread allocations across managers with different investment styles, factors and portfolio behaviour. The approach can result in exposure to several underlying portfolios within a single FoF structure.

That distinction matters in the small-cap segment because portfolios managed by different fund houses can differ substantially in stock selection and sector allocation.

The FoF route also introduces an additional layer to the structure. Investors own units of the WhiteOak scheme, which in turn owns units of the underlying small-cap funds.

According to The Economic Times' weekly NFO tracker, the minimum subscription amount for the scheme is ₹500.

The fund arrives during a period in which small-cap schemes remain an important component of India's active equity mutual fund industry, but the segment has also experienced periods of sharp valuation and performance dispersion.

Rather than choosing a single active small-cap fund manager, WhiteOak's new product is designed to allocate across several.

It is the first FoF launched by the fund house.

Subscriptions under the NFO are scheduled to close on October 12, after which the scheme will subsequently reopen for ongoing transactions in accordance with its offer documents.