DSP BlackRock Micro Cap Fund shuts fresh inflows; consider DSP BlackRock Small and Mid Cap Fund
DSP BlackRock Micro Cap Fund is not only one of the best performing funds it has also become one of the largest funds in its category. While we continue to find interesting investment opportunities for the fund to invest in, its current size poses the bigger challenge of liquidity. Due to the fund size, it is increasingly difficult to incrementally build positions, i.e. to increase stock weightage of companies to a meaningful size in the portfolio.
Having less than desired weightage in stocks that the fund invests in, could limit the fund’s ability to generate returns in the future. Hence, in the interest of investors, we have taken a decision to stop accepting fresh investments - both via lumpsum and SIPs. However, we will continue to accept flows coming from existing SIPs.
Depending on our views on liquidity and investment opportunities in the future, we will review the possibility of opening the fund for fresh investments again.
We would like to suggest to our investors and advisors that they should evaluate our DSP BlackRock Small and Mid Cap Fund (AUM: 2,760.94 Cr. as of Jan 31, 2017) for their clients who are looking at small and mid cap exposure for their portfolios. While the investment philosophy of and the fund manager for the DSP BlackRock Micro Cap Fund and the DSP BlackRock Small and Mid Cap Fund are the same, the DSP BlackRock Small and Mid Cap Fund's portfolio largely comprises of securities ranked 100 – 300 by market capitalization with a small exposure to securities ranked beyond 300 by market capitalization.
Both the funds follow a bottom-up stock selection approach with a significant amount of focus on identifying fundamentally strong companies which could create value over the long term. Vinit Sambre manages both funds.
The DSP BlackRock Small and Mid Cap Fund is a 10 year old fund and has generated a *CAGR of 16.27% since inception Vs Benchmark (Nifty Free Float Midcap 100) of 12.05%.
