Companies listed on stock exchanges are classified into different sectors. For example, Maruti belongs to the auto sector, Sun Pharma belongs to pharma and Hindustan Unilever belongs to FMCG. Impact of macro factors like policy announcements, reforms and demographic changes are generally equal on companies belonging to the same sector.
For instance, if the government of India decides to lower the excise duty (tax on production) for pharma sector, it will lower cost of production for all pharmaceutical manufacturers. If an investor wants to take advantage of this announcement, first she will have to find out names of different pharma companies listed on the exchange, then she will have to screen good companies from the lot and lastly invest in each one of them separately. Going forward, she will also have to manage her investment in different companies separately.
At smallcase, we believe that the process for taking sector exposures should be easy, simple and efficient. For this reason, we have smallcase sector trackers. A smallcase sector tracker consists of all the important stocks of that sector in a way that the total marketcap of stocks in the smallcase is more than 90% of the sector marketcap. Or simply, they represent more than 90% of the sector. This means that whenever auto stocks go up, the smallcase auto tracker will also give positive returns.
The smallcase platform has multiple trackers across sectors like auto, FMCG, media, metals etc.