To generate long term capital appreciation by predominantly investing in equity and equity related instruments of Small Cap companies. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved.

Why invest in Small Cap?

Investment Strategy

Mutual Fund

September, 2019

Principal Small Cap Fundinvesting in small cap stocks)(An open ended equity scheme predominantly

Small Can Grow Mighty with Time!

Over 1500 annual interactions with companies in our universe

The investment strategy stated above may change from time to time without any notice and shall be in accordance with the strategy as mentioned in the Scheme Information Document of the scheme.

Portfolio Construction Portfolio Review Sell Discipline

Number ofSmall Cap Stocks

~4750

LiquidityDaily trade value in

excess of Rs. 1 cr

ManagementQuality

Track Record andGrowth Outlook

Our Small CapStocks Universe

~200

Meet every companybefore investing

No active cash calls

Typically Single stockallocation notexceeding 5%

Typically 3-4 annual interactions with

portfolio companiesIn-house earnings

estimates with regular monitoring and revision

Strict check onportfolio liquidity

Achievement of TargetPrice

Adverse developmentsin Corporate Governance

Adverse policiesor environment

Present in large organized sectors & have potential to scale up.

Present in the sectors where large & mid caps have limited presence.

Businesses in emerging industries.

Usually under-researched and under-owned by institutional investors.

Top100

101-250

251ONWARDS

Large Cap

Mid Cap

Small Cap

Number of stocks 100

Number of stocks 150

Number of stocks ~4600+More sectoral opportunities

Small caps have bounced back with greater intensity after corrections

Source: Bloomberg; Internal AnalysisPast performance may or may not be sustained in future.

Influencing Factors

Economy

Gov. Finances

Consumption

Interest Rates

(ret

urns

)

CY 2009

CY 2008 CY 2011 CY 2013 CY 2018

CY 2012 CY 2014 CY 2019

110%

-71%-33% -7% -28%

39% 57%

Nifty Small Cap 100 TRI

This communication is for distributors only.

Top 5 Industry Allocation (as on ) September 30, 2019 Key Statistics (as on , 2019)September 30

Construction Project

Chemicals Software Cement

16.24% 12.92% 8.05% 6.87% 6.73%

Banks *Total Expense Ratio include GST on management fees.# as on September 30, 2019

AUM

`147.29cr.

Total Expense Ratio*#

Direct Plan 0.71%

Regular Plan2.49%

Fund Manager

Note: Performance of Principal Small Cap Fund is not given as the scheme has not completed 1 year.

Investing Facts

Top 5 Holdings (as on September 30, 2019)

Plans: Regular & Direct Options: Both the Plans offer Growth & Dividend Option. The Dividend Option under both the Plans will have the facility of Payout and Reinvestment.Minimum Investment Amount: New Investor: `5,000 | Existing Investor: `1,000Benchmark: Nifty Small Cap 100 IndexEntry Load: NILExit Load: If redeemed/ switched on or before 1 year from the date of allotment:• Nil for redemption/ switch out of units upto 25% of the units allotted (the limit).• 1% on redemption in excess of 25% of the limit stated above- Redemption of

units would be done on First in First out Basis (FIFO).• Nil thereafter

Total work experience of 25 years. Managing this scheme since July, 2019

Ravi Gopalakrishnan

Total work experience of 15 years. (Associate Fund Manager)Managing this scheme since May, 2019

Siddarth Mohta

Name % of NAV Industry

ICICI Bank Ltd. Banks 3.63

State Bank of India Banks 2.90

Galaxy Surfactants Ltd. Chemicals 2.57

Navin Fluorine International Ltd. Chemicals 2.40

Fine Organic Industries Ltd. Chemicals 2.33

(% of NAV)

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

ŸLong term Capital Growth

ŸPredominantly investment in equity and equity related instruments of Small Cap companies

Principal Small Cap Fund: (An open ended equity scheme predominantly investing in small cap stocks) This product is ~suitable for investors who are seeking -

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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