Principal Mutual Fund launched Principal Small Cap Fund — an open-ended equity scheme predominantly investing in small-cap stocks on Monday. The new fund offer will close on May 6. The scheme aims to identify and invest in smaller companies that have the potential to generate higher returns over a longer period. Small-cap funds have the potential of becoming excellent wealth creators over the long term. Their exposure to large organised sectors gives them the potential to scale up, said PVK Mohan, Head of Equity, Principal Mutual Fund.