INSUBCONTINENT EXCLUSIVE:
DSP Mutual Fund will accept investments through systematic investment plan (SIP) and Systematic transfer Plan (STP) in the DSP Small Cap
Fund beginning September 3
The fund will, however, continue to not accept lump-sum investments.
“Broad valuations in the small cap space have come off
There could be volatility over the next one year
Investors could beat the volatility to add to small caps using SIPs,”says Kalpen Parekh, president, DSP Mutual Fund.
DSP Small Cap Fund
has been one of the best performers in the small cap category over five-year and 10-year periods, yielding returns of annualised 34% and
However, performance trailed that of peers over the last one year with the scheme returning only 2.3% compared to its benchmark category
average return of 7.4%.
The BSE Small Cap Index is down 19% from its peak, with several individual stocks losing 25-35%
Earnings outlook for many stocks is rising as the economy improves.
The scheme had stopped accepting both lump-sum and SIP/STP investments
Before that in August 2016, the scheme had restricted lump sum investments to ₹1 lakh per person.
In September 2014, the scheme had put a
restriction of Rs 2 lakh for daily lump sum subscription.
Wealth managers believe small caps are for investors who hold a longterm
view.
“Investors who will not be shaken by the short term volatility of the market and can stay invested for 5-10 years to create wealth
should opt for small cap funds,” says Nisreen Mamaji, CEO, Moneyworks Financial Advisors.
