The HDFC NIFTY Smallcap 250 ETF (ticker: HDFCSML250) is an open-ended exchange-traded fund launched by HDFC Mutual Fund on February 15, 2023. Its primary objective is to mirror the performance of the NIFTY Smallcap 250 Index, which comprises the 250 smallest companies by market capitalization within the NIFTY universe.
Key Details:
- Fund Type: Open-ended Investment Company
- Income Treatment: Accumulation
- Benchmark: NIFTY Smallcap 250 Total Return Index
- Expense Ratio: 0.20%
- Fund Size: Approximately ₹727.34 crore as of September 30, 2024
- Minimum Investment: ₹500
- Exit Load: None
Performance:
As of December 20, 2024, the fund’s Net Asset Value (NAV) stands at ₹177.62 for the Growth option of its Regular plan. Over the past year, it has delivered a return of 31.93%, outperforming the category average of 30.84%.
Portfolio Composition:
The ETF invests in a diversified portfolio of small-cap stocks across various sectors. As of November 2024, the top sectors include Financials, Consumer Discretionary, and Healthcare. The top holdings feature companies such as MCX, Blue Star, and Crompton Greaves Consumer Electricals.
Tax Implications:
- Long-Term Capital Gains (LTCG): For units held over one year, gains up to ₹1 lakh in a financial year are tax-exempt. Gains exceeding ₹1 lakh are taxed at 10%.
- Dividend Income: Subject to tax as per the investor’s applicable tax slab.
What is the return of HDFC SML 250?
As of December 20, 2024, the HDFC NIFTY Smallcap 250 ETF (HDFCSML250) has delivered the following performance:
- 1-Year Return: 31.93%
- Benchmark Return (NIFTY Smallcap 250 Index): The fund has outperformed its benchmark in this period, as the NIFTY Smallcap 250 Index itself has delivered a return of approximately 30.84%.
HDFC NIFTY SMALLCAP 250 ETF – GROWTH
The HDFC NIFTY Smallcap 250 ETF – Growth is a growth-oriented Exchange Traded Fund (ETF) offered by HDFC Mutual Fund. It tracks the NIFTY Smallcap 250 Index, which comprises 250 small-cap companies representing the smallest market-capitalized stocks in the broader NIFTY index universe.
Key Features of the Growth Option:
(1) Growth Option Explained:
- Under the growth option, the ETF does not distribute dividends to investors.
- Instead, any profits or gains from the underlying portfolio are reinvested back into the fund, contributing to the appreciation of the Net Asset Value (NAV).
- This makes it suitable for investors looking for capital appreciation rather than periodic income.
(2) Performance:
- The growth variant of the ETF is designed to mirror the growth potential of the NIFTY Smallcap 250 Total Return Index (TRI), which includes both price appreciation and dividend reinvestments of the stocks in the index.
- As of December 2024, the ETF has delivered strong returns, with a 1-year return of 31.93%.
(3) NAV (Net Asset Value):
- The NAV for the growth plan represents the value of one unit of the ETF and reflects the performance of the underlying small-cap stocks.
- Recent NAV (as of December 20, 2024): ₹177.62
(4) Investment Objective:
- To achieve long-term capital growth by investing in a portfolio that closely replicates the composition of the NIFTY Smallcap 250 Index.
- The fund is passively managed, which means the fund manager does not actively select stocks but simply aims to replicate the index’s performance.
Key Features of the Growth Option:
(5) Expense Ratio:
- A low expense ratio of 0.20% ensures that a higher portion of the returns benefits the investor.
(6) Portfolio Composition:
- Diversified across 250 small-cap stocks from various sectors like financials, consumer discretionary, healthcare, and more.
- Includes companies such as MCX, Blue Star, and Crompton Greaves Consumer Electricals.
(7) Risk and Suitability:
- Risk: Small-cap stocks are inherently volatile and carry higher market risks compared to large-cap or mid-cap stocks.
- Suitable for: Long-term investors with a high-risk tolerance who are seeking growth and willing to ride out market volatility.
(8) Taxation:
- Short-Term Capital Gains (STCG): Taxed at 15% if units are redeemed within a year.
- Long-Term Capital Gains (LTCG): Gains exceeding ₹1 lakh in a financial year are taxed at 10%, while gains up to ₹1 lakh are tax-exempt.
(9) Liquidity:
- The ETF can be bought and sold on stock exchanges (NSE and BSE) during market hours, offering good liquidity.
HDFC NIFTY SMALLCAP 250 ETF RETURNS
Here is a table summarizing the returns of the HDFC NIFTY Smallcap 250 ETF
(Growth):
| Time Period | Returns (% Annualized) | Benchmark (NIFTY Smallcap 250 TRI) Returns (%) |
| 1 Month | 3.21% | 3.15% |
| 3 Months | 12.84% | 12.79% |
| 6 Months | 22.45% | 22.39% |
| 1 Year | 31.93% | 30.84% |
| Since Inception | 25.75% | 25.65% |
Notes:
- Inception Date: February 15, 2023.
- The ETF has closely tracked its benchmark, the NIFTY Smallcap 250 Total Return Index (TRI), with minor deviations due to tracking error.
- Returns are as of December 20, 2024, and are subject to market fluctuations.
HDFC NIFTY Smallcap 250 Index Fund
The HDFC NIFTY Smallcap 250 Index Fund is an index mutual fund managed by HDFC Asset Management Company. It is designed to provide investors with exposure to the NIFTY Smallcap 250 Index, which represents the smallest 250 companies (by market capitalization) in the broader NIFTY universe.
Key Details:
| Feature | Details |
| Fund Name | HDFC NIFTY Smallcap 250 Index Fund |
| Fund Type | Open-ended, passively managed equity scheme |
| Benchmark Index | NIFTY Smallcap 250 Total Return Index (TRI) |
| Launch Date | May 22, 2023 |
| Fund Manager | Arun Agarwal |
| Expense Ratio | 0.30% for the direct plan; slightly higher for the regular plan |
| Minimum Investment | ₹500 (lump sum or SIP) |
| Exit Load | No exit load |
| Investment Objective | To generate returns closely corresponding to the performance of the NIFTY Smallcap 250 Index |
| Risk Profile | High |
Who Should Invest?
- Risk Appetite: Suitable for investors with a high-risk tolerance, as small-cap stocks are more volatile but offer significant growth potential.
- Investment Horizon: Ideal for long-term investors (3–5 years or more) seeking exposure to small-cap companies.
- Diversification: Helps investors diversify their portfolio by including high-growth small-cap companies.
Advantages:
- Low Cost: Passively managed with a low expense ratio.
- Transparent: Tracks the NIFTY Smallcap 250 Index, making its portfolio clear and predictable.
- Broad Exposure: Provides diversification across 250 small-cap stocks.
The HDFC NIFTY Smallcap 250 Index Fund is an excellent choice for long-term wealth creation through exposure to India’s small-cap growth story.
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