DSP Investment Managers would be opening its DSP Small Cap Fund for subscriptions through the SIP/STP route on September 3. This fund, which has given 20.69% CAGR in the last 10 years, is extremely popular with investors. An investment of Rs 1 lakh in DSP Small Cap Fund (Erstwhile DSPBR Small Cap Fund) would have become Rs 6.56 lakh in these 10 years.
Other routes like subscription/switch-in application(s) in the scheme and/or registration of new Dividend Transfer Plan (DTP) in the scheme will continue to be temporarily suspended. Investors must note that like any other smallcap fund, the DSP Small Cap Fund is a moderately high-risk equity scheme.
Investors may recall that DSP first restricted flows into the Rs 5,100-crore scheme in October 2014 to Rs 2 lakh per investor as it felt that further large inflows into the scheme may prove detrimental to the interest of the existing unitholders.
In August 2016, DSP further restricted flows into the scheme to Rs 1 lakh per investor. Then, the scheme stopped fresh inflows altogether in February 2017.
Kalpen Parekh, President, DSP Investment Managers Pvt. Ltd, said, “We have always believed that we will re-open the Scheme for subscriptions in a structure that we feel will be best suited for our investors when our fund managers feel comfortable to absorb further flows. While the small-cap space has seen some correction, it also presents an opportunity to buy certain high conviction stocks at reasonable valuations.
Parekh said the fund-house still expects the market to remain volatile in the mid-2019 run-up to the election. That is the reason DSP has opened subscriptions to the 11-year old scheme through the STP/SIP route only.
Vinit Sambre, Head – Equities, DSP Investment Managers Pvt. Ltd., said “The earnings cycle seems to be picking up, but at the same time, broad valuations continue to be high. While some small caps have seen a correction, we have re-oriented the portfolio by taking advantage of large price corrections and adding some of these small-cap stocks to the portfolio.”
Sambre, along with Resham Jain and Jay Kothari, manages the DSP Small Cap Fund. The fund has an exit load of 1% if redeemed between 0 – 12 months.
The DSP Group, headed by Hemendra Kothari, is one of the oldest and most respected financial services firms in India, having commenced its stockbroking business in the 1860s. In August 2018, the DSP Group completed the buyout of BlackRock’s 40% stake in DSP BlackRock and changed its name to DSP Mutual Fund.