In this video we review the small cap index NFO from Nippon India Mutual Funds. We are joined by the deputy head of the ETF business at Nippon India Asset Management Ltd., Mr. Hemen Bhatia, to answer our queries. The Nippon India Nifty Small Cap 250 Index Fund is a passive fund, which will replicate the Nifty Small Cap 250 index. The stocks and weight of each stock will be the same as it is in the index. Unlike an active fund, the fund manager will not be taking any active calls on which sectors or stocks to include in the portfolio. The small cap index has underperformed the large cap (nifty 50) and broader (Nifty 500) index in the last 3-5 years. However, small caps have outperformed in the last 6 months to 1 year. As per Mr. Hemen Bhatia, the small cap index is expected to outperform the broader indices in the long term.