Dsp Blackrock Micro Cap Fund: A Guide To Investing

DSP Small Cap Fund is a mutual fund scheme from DSP Mutual Fund. The fund aims to achieve long-term capital appreciation by investing in a portfolio of stocks of small-cap companies. DSP Small Cap Fund has a conservative investment strategy, with most of its holdings in Large Cap stocks and debt instruments. The fund has a very high risk level and is suitable for investors who are willing to invest for at least 3-4 years and are seeking high returns. The expense ratio of the fund is 1.7%, and the latest NAV as of October 4, 2024, is 195.442. DSP Mutual Fund is the leading mutual fund investment company in India, and investors can purchase the DSP Small Cap Fund directly from their website or through platforms like MF Central and MF Utility.

How to invest in DSP Small Cap Direct Plan Growth

DSP Small Cap Direct Plan Growth is a mutual fund scheme from DSP Mutual Fund. The scheme was launched on 16 December 1996 and has an AUM (Asset Under Management) of ₹1,67,044 Cr as of 4 October 2024. The latest NAV (Net Asset Value) is ₹219.34 as of 4 October 2024.

The aim of the fund is to seek long-term capital appreciation by investing in a portfolio that is made up largely of stocks from small-cap companies. DSP Small Cap Direct Plan Growth is rated as a very high-risk fund. The minimum SIP (Systematic Investment Plan) investment is set at ₹100.

You can invest in the DSP Small Cap Direct Plan Growth fund directly from the DSP Mutual Fund website. Alternatively, you can use platforms such as MF Central and MF Utility. If you prefer not to buy mutual funds online, you can seek assistance from a mutual fund distributor, such as a bank.

Before investing, it is important to note that this fund carries a very high risk of negative returns. Investors should be prepared for the possibility of higher losses in their investments. It is recommended that investors hold their money in the fund for at least 3-4 years.

The fund's portfolio and asset allocation

The DSP Small Cap Fund - Regular Plan is a mutual fund scheme from DSP Mutual Fund. The fund aims to seek long-term capital appreciation by investing in a portfolio of stocks of small-cap companies. As of 30 April 2024, the fund has allocated 93.15% of its portfolio to equity, with the top 5 sectors being Capital Goods (11.92%), Consumer Discretionary (8.67%), Chemicals, Materials, and Healthcare. The fund's holdings are mostly in Large Cap stocks and debt instruments, indicating a conservative investment strategy.

The fund's top 5 equity holdings as of 30 April 2024 are:

• Cyient Ltd.
• Ipca Laboratories Ltd.
• Jubilant Ingrevia Ltd.
• Suprajit Engineering Ltd.
• EClerx Services Ltd.

The fund has a majority of its investments in domestic equities, with 4.04% in Mid Cap stocks and 63.01% in Small Cap stocks. As of 30 September 2023, the asset allocation of the fund was 95.35% in Equity and 4.65% in Cash & Cash Equivalents.

The fund has a Very High-risk rating and is suitable for investors who are looking for very high returns and are ready for the possibility of higher losses. It is important to note that investors should not invest in this fund if they need to redeem their investment in less than seven years.

The fund's risk and taxation

DSP Small Cap Fund is a mutual fund scheme from DSP Mutual Fund. The fund carries a high risk, with investors warned that they should be prepared for the possibility of higher losses. The fund has no lock-in period, and investors can buy directly from the DSP Mutual Fund website or through platforms like MF Central and MF Utility.

Capital Gains Taxation

If you sell your mutual fund units within a year of the purchase date, short-term capital gain tax will be applied at a rate of 20%. Any cess or surcharge is not included in this rate. If you sell after one year, long-term capital gain tax will be applied. The current rate is 12.5% if your total long-term capital gain exceeds 1.25 lakh. Again, any cess or surcharge is not included in this rate.

Dividend Taxation

Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

The fund's performance and returns

The DSP Small Cap Fund - Regular Plan has delivered 17.58% returns since its inception 16 years ago. The average annual return of this fund is 42.35%. The trailing returns over different times are 42.35% (1 year), 24.88% (3 years), and 31.25% (5 years). The fund's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. The fund has a very high risk level, according to SEBI's Riskometer.

The expense ratio of the DSP Small Cap Fund - Regular Plan is 1.75%, while the direct plan has a lower expense ratio of 0.84%. The fund has delivered 3Y, 5Y, and 10Y annualised returns higher than the category average. However, its 1Y annualised returns are lower than the category average by 5.06%.

The DSP Small Cap Fund is suitable for investors looking for very high returns and who are willing to invest for at least 3-4 years. These investors should also be prepared for the possibility of higher losses in their investments.

The fund's managers and their expertise

The current fund managers of the DSP Small Cap Direct Plan Growth fund are Vinit Sambre, Jay Kothari, Resham Jain, and Abhishek Ghosh. Sambre is a B.Com and FCA. Prior to joining DSP, he was associated with DSP Merrill Lynch Ltd., IL & FS Investsmart Ltd., Unit Trust of India Investment Advisory Services Ltd., Kisan Ratilal Choksey Shares and Securities Pvt. Ltd., and Credit Rating Information Service of India Ltd. Jain is a B.Com, MS, FRM, CFP, and CFA. Before joining DSP Mutual Fund, he worked with B&K Securities (I) Private Limited, Jaihind Projects Ltd., Arvind Ltd., and Anagram Knowledge Academy Ltd.

With an extensive experience of 15 years in managing equity and related investments, the fund managers are focused on picking quality companies and holding them for a long duration to generate good compounding returns.

Frequently asked questions