We may increase cash in smallcap, midcap funds: DSP Mutual Fund

DSP Mutual Fund, which released its stress report on Friday, highlighted that DSP Small Cap will be able to liquidate 25% of the portfolio in 16 days and 50% in 32 days. DSP Mid Cap Fund will be able to liquidate 25% of the portfolio in nine days and 50% portfolio in 17 days.

According to the report, the DSP Small Cap Fund has approximately 7% cash, while the DSP Mid Cap Fund has approximately 5.5%.

“We may increase cash in the scheme to further help improve our liquidity profile and will continue to be true to the label,” said DSP Mutual Fund.


“Our mid-month cash position is better than the February 2024 end position and will further increase by March 2024,” the report further highlighted.

The fund house also stated that DSP Small Cap Fund has zero exposure to the largecaps as it wants to offer pure smallcap options. DSP Mid Cap scheme has minimal exposure of around 7% to largecaps with most exposure beyond top Nifty 50.

In DSP Mid Cap Fund, the top investor holding is only 0.3% of AUM and top 10 investor holding only is 1.8% of AUM (which includes promoters/skin in the game investments). In the DSP Small Cap Fund, the top investor holding is only 0.2% of AUM and top 10 investor holding is only 1.5% of AUM (which includes promoters/skin in the game investments).

Around 70% of active investors hold less than Rs 2 lakh in our smallcap and midcap schemes. The average AUM per investor for DSP Small Cap Fund is Rs 3.25 lakh and for DSP Mid Cap Fund it is Rs 2.75 lakh.

The portfolio turnover ratio of DSP Mid Cap Fund is 0.30 and for DSP Small Cap Fund it is 0.25.

“We have built a quality portfolio for our investor to help sail through turbulent market conditions,” said the fund house. The portfolio TTM ROE for DSP Small Cap Fund is 20.16.

DSP Small Cap Fund manages assets worth Rs 13,703 crore and DSP Mid Cap Fund manages assets worth Rs 16,302 crore as of February 29, 2024.