Finance Technology Trends

What is Smallcase? Should You Go For Thematic Investment?

You are a smart investor but have burnt your hands in equity markets in the past. So, you tend to take the mutual funds route usually. But, by the virtue of your job, or may be general interest, you know about a space more than an average joe. For example, I worked for Vodafone for a while in the past. I know how telcos operate, the profit drivers, the threats etc. I also know how telecom is going to ride the digital India wave in the coming future. It make complete sense for me to buy VI, Airtel and Reliance Stocks right? But what about companies supplying network equipment to these brands? E.g. Indus. I would surely NOT want to miss the rally in that segment. By now, if you are thinking of sleeping on the piles of money, note that it is not a particular stock that you are bullish on. It is rather, a theme, a space, an industry. Enter, smallcase. Your tool for thematic investment.

What is Smallcase?

In a very basic sense, smallcase is a mutual fund. Just like a MF, smallcase would invest in multiple stocks. But, unlike mutual funds, this time you know what your money goes into. A fund manager is not governing your portfolio while keeping you in the dark.

Smallcase allows you to invest in these stocks with your preferred underlying theme. All these stocks can be purchased with a single click of button and will get credited to your Demat account as per the normal cycle. They have tied up with top brokers of the country and integrated their app with them. I have used smallcase with Zerodha and the experience was quite seamless.

To further establish the essence of ‘thematic investment’, let us look at some examples of smallcases I particularly liked:

  • The Great Indian Middle Class:

This smallcase includes the companies that are going to benefit from the rising middle class in the country. So if you are bullish on the upcoming rise of the middle class and believe that increased income levels would mean increased consumption, you can opt for this smallcase.

You have the access to the complete information in terms of what stocks comprise of this case. Also, you would know what is the weight assigned to each stock. You can also edit the stocks and their weights as per your suitability.

Smallcase Analysis
  • Electric Mobility:

On a similar note, if you think EV is the next big thing in India, this smallcase is for you. It invests in:

  1. Battery Companies
  2. Auto Parts
  3. Industrial Machinery
  4. 4w, 2w companies who have entered this space
  5. Software companies

In toto, it is quite a holistic approach to invest in a theme.

Who Should Invest in Smallcase?

You should use smallcase approach to enter stock markets if:

  • You are a beginner: Instead of fundamental and technical analysis of a specific company, you are simply bullish on a theme.
  • If you plan to go long: You should invest in a particular small case and wait. The way you are suggested to do for mutual funds. But this time, you have a stronger trust backing your patience.
  • If you do not have bulk money to play around in stock market: Did I mention that you can invest in a smallcase as you would do in mutual fund through SIP? Pretty handy right?


Some key benefits I can think of using this over mutual funds are:

  • I know where my money lies.
  • Dividends are tax free but mutual funds returns aren’t
  • I can partially exit a small case by selling certain holdings as well
  • Smallcase, just like a mutual fund is revisited and rebalanced at a periodic interval (revealed up front).

I am currently invested in some of my key themes and plan to maintain the status quo for a while. I hope you find value in this post (literally)

Until Next Time..

A techno manager by profession and a hardcore geek at heart. I love to poke my nose into tasks where other usually gave up on. My hobbies include, reading about latest trends in tech industry, playing guitar and yes, memes!

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