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DSP BlackRock Micro Cap Fund Renamed to DSP Small Cap Fund

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DSP BlackRock Micro Cap Fund has been renamed to DSP Small Cap Fund. One of the most famous SIP funds of previous years, DSP BlackRock Micro Cap Fund had a stellar run from 2014 – 2016. The fund gave 102% returns in 2014, doubling investor money in less than a year! However, DSP Small Cap Fund has failed to beat its peers in the last 18 months in spite of stopping fresh investments from Feb 2017.

Categorized as a small-cap fund, DSP Small Cap Fund invests a minimum of 65% in small-cap companies. Companies not in the top 250 based on total market capitalization are classified as small cap companies. With assets of Rs ₹4,910 cr, the fund is managed by Vinit Sambre, Jay Kothari, and Resham Jain.

 

 

DSP Small Cap Fund Re-opened for subscription

DSPBR Small Cap fund has re-opened the fund for fresh subscriptions from 4th September 2018. The fund will accept SIP and STP investments but will continue its pause on lump sum investments. Sticking to his words in an interview given in January 2018, the fund manager, Mr. Vinit Sambre has opened the fund for fresh subscriptions after a market correction of 11.08% (in 2018) in BSE Small-Cap index

DSPBR Small Cap Fund was closed for a lump sum and SIP investments since Feb 2017. However, the fund continued to accept older SIPs. The fund managers closed it to prevent further large inflows to negatively impact the returns for the existing unitholders. The fund managers said that they have closed new investments mainly because of the dearth of opportunities at current valuations. He also added that they are facing challenges due to the increased fund size in respect to the category to which the fund caters to.

Performance

DSP Small Cap was one of the best performing funds from 2014 to 2016. The fund has beaten its benchmark consistently over the years till 2017. The fund has also handled the bear faces (2008 and 2011) very well. However, due to the underperformance since 2017, DSP Small Cap lags its benchmark, BSE Small Cap TRI Index in 1 and 3 years performance. The fund still beats its performance in 5-year performance by 24 percentage points.

A SIP of Rs 5,000 started in DSPBR Small Cap Fund 5 years back would have given 9.13% annualized returns. The investment of ₹3 lakh would have grown to ₹3.85 lakh. Meanwhile, a similar SIP in its benchmark index would have grown to ₹3.59 lakh.

Investment Strategy

DSPBR Small Cap Fund follows a bottom-up approach to picking stocks. The fund managers buy and hold the stocks that they believe are growth-oriented and have a competitive edge over its peers. They strongly believe in valuation and are unwilling to compromise on quick gains. While they believe in long-term gains they are unaffected by the short-term volatility in the small-cap world. The fund manager has now added trading to his portfolio, where he invests approximately 5% of the portfolio to capture gains from market movements. The fund currently invests 92% in equity out of which 85-90% is small-cap. Roughly 7-8% is in money market instruments.

The top five holding sectors constitute 83.6% of the portfolio. These include consumer cyclical (30.9%), basic material (27.6%), technology (9.3%), healthcare (8.0%), and financial services (6.8%).

 

Fund1 Year Return (%)3 Year Return (%)5 Year Return (%)
DSPBR Small Cap Fund-25.57%7.89%24.10%
HDFC Small Cap Fund-10.93%17.78%20.33%
L&T Emerging Businesses Fund-17.06%17.02%-%
Franklin India Smaller Cos Fund-18.15%10.31% 22.35%
Reliance Small Cap Fund-20.16%13.80%26.49%
Aditya Birla SL Small Cap Fund-26.18%10.15%19.63%

Recommendation

The small-cap space has better funds in the market like Reliance Small Cap Fund, SBI Small Cap Fund, and L&T Emerging Business Fund. But if you have been fascinated with this fund for a long time, then you can consider investing in it.

Fund NameDSPBR Small Cap Fund
Original Fund NameDSPBR Micro Cap Fund
Launch DateJune 14th, 2007
AUMRs 4,910Cr
Return (Returns greater than 1 year are annualized)Since Launch: 20.88%
1 Year: -25.57%
3 Year: 7.89%
5 year: 24.10%
Expense Ratio2.4%
Fund Category RiskHigh
Investment PlanGrowth
Minimum Investment Horizon5+ years
Minimum InvestmentRs 1,000
Minimum Additional InvestmentRs 1,000
Exit Load1% if withdrawn within 1 year
Fund Manager(s)Jay Kothari
Reshma Jain
Vinit Sambre

Ride the market like a Pro, Invest in Upwardly Small and Mid Cap Portfolio investment plan. Happy Investing!

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