One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.
The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries.
Let us talk about the consumer product – DSP Small Cap Fund.
About the DSP Small Cap Fund
Investment objective:
The primary investment objective is to seek to generate long-term capital appreciation from a portfolio substantially constituted of small-cap companies’ equity and equity-related securities.
Investment process:
- DSP Small Cap Fund invests in some of the smallest, fastest growing & innovative Indian companies.
- It considers companies with strong business models in high-growth sectors and efficient management teams focused on utilizing resources wisely to unlock high-growth potential eventually.
- Some of these companies could be just starting out and still in the early stages of proving their business plans- generally under-owned, under-researched & under-valued.
Portfolio composition:
The portfolio holds significant exposure in small-cap stocks at 86%, and major sectoral exposure is to Industrial Products, which account for roughly 14% of the portfolio.
The top five sectors hold more than 50% of the portfolio.
Source: DSP MF
Top 5 Holdings for DSP Small Cap Fund
| Name | Weightage % |
| Cyient Limited | 4.09 |
| Suprajit Engineering Limited | 3.66 |
| Ratnamani Metals & Tubes Limited | 3.56 |
| Triveni Engineering & Industries Limited | 3.29 |
| K.P.R. Mill Limited | 2.95 |
Source: DSP MF
Performance:
If you had invested 10,000 at the fund’s inception, it would now be valued at Rs 1,09,789.
Source: DSP MF
Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 16.46%
Fund Manager
- Vinit Sambre has been managing this fund since June 2010 as a Co-Fund Manager. Vinit joined DSPIM in July 2007 as Portfolio Analyst for the firm’s Portfolio Management Services (PMS) division, which manages discretionary accounts and provides advisory services to institutional clients. As a research analyst, he focused on sectors like Pharmaceuticals, Power Utilities, Chemicals, Fertilizers, and Textiles. Vinit specializes in the small and mid-cap space and has over 16 years of relevant work experience. Vinit is a Chartered Accountant from the Institute of Chartered Accountants of India.
- Resham Jain has been managing this fund since March 2018 as a Co-Fund Manager for the Equity portion. Resham joined DSP Investment Managers in March 2016 as Assistant Vice President of the Equity Income Team. He has over nine years of experience. Before joining DSP Investment Managers, he worked for B&K Securities (I) Private Limited, Jaihind Projects Ltd & Arvind Ltd.
- Abhishek Ghosh has been managing this fund since March 2013 as a Co-Fund Manager. Abhishek has a total work experience of 14 years. Abhishek joined DSP investment managers in September 2018 as Assistant Vice President of the equity team. His prior experience includes working in Motilal Oswal, IDFC Securities, BNP Paribas, B&K securities, and Edelweiss Financial Services. He has an MBA in finance and holds a Bachelor’s in Electronics Engineering.
- Jay Kothari has been managing this fund since March 2013 as a Co-Fund Manager. Jay Kothari, Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005 and has been with the Investment function since January 2011. Before joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University and an MBA in Finance from Mumbai University.
Who should invest in DSP Small Cap Fund?
Consider this fund if you
- Are you looking to tactically allocate 10-15% of your portfolio to high-risk opportunities?
- Understand that very high risk is involved in this category of funds in the quest for high returns.
- Have the patience & mental resilience to remain invested for a decade or more.
- Recognize market falls as good opportunities to invest more.
Why invest in this Fund?
- This high-risk, high-return strategy offers the potential to ‘earn big’ returns.
- It can help you beat the impact of rising prices over the long term.
- It can be a suitable choice for tactical allocation.
Time Horizon
- One should look at investing for at least ten years or even more.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The DSP Small Cap Fund has a proven track record of more than 15 years, where it has delivered a CAGR (Compounded Annual Growth Rate) of 16.6%.
Thus, it is the best option for investors who are willing to take small-cap exposure with high risks for a long-term time horizon.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
