DSP Small Cap Fund

Diversified

Equity

India Micro Cap

Others

Small Cap

Aggressive growth Investor Profile

Investor Profile

1–7 yearsInvestment Horizon

HNI, UHNI, Retail Investor, Mass AffluentTarget Segments

SEBI registered equity mutual fund suitable for all investor categoriesRegulatory Fit

Dsp Small Cap Fund Growth invests in smaller Indian companies for higher growth potential with higher risk.

What This Strategy Does

DSP Small Cap Reg Gr is an equity small-cap fund which captures India's ₹15 trillion small-cap opportunity through a disciplined, bottom-up approach, deploying capital across industrials, consumer cyclicals, and basic materials to achieve broad-based earnings growth.

CW Expert Research Notes

Resilient Downside Protection

The fund's emphasis on quality businesses with durable competitive advantages has enabled resilient downside protection, outperforming the benchmark in 8 out of 12 years.

Differentiated Portfolio Construction

The portfolio is constructed with a true-blue small- and mid-cap approach, avoiding large-caps and frothy businesses to maintain quality, while selectively adding turnaround stories and capex-oriented themes linked to economic growth.

Structural Growth Positioning

The fund is positioned to benefit from India's structural growth story and recovery in consumption, with exposure to sectors like specialty chemicals, textiles, and building materials.

Performance and Risk Analysis

Historical returns, volatility patterns, and how this fund has performed relative to its benchmark.

Fund Performance

9.0% AnnuallyAlpha

+14.7% vs +9.9% benchmarkSince Inception

+16.3% vs +6.3% benchmark3Y Annualized

+18.0% vs +6.5% benchmark5Y Annualized

DSP Small Cap Fund

Benchmark Index

Benchmark Performance Comparison

Dsp Small Cap Fund

NIFTY 50

Risk Profile

Standard Deviation25.4%

Maximum Drawdown-21.9% | Oct 2024

Sharpe Ratio0.60

Beta0.95

Upside Capture91%

Detailed Risks

Market Risk

Potential recession and weakening consumer demand could disproportionately impact small-cap stocks, mitigated by sector diversification.

Liquidity Risk

Volatility spikes or market dislocations could impair small-cap liquidity, limiting rebalancing flexibility, partially offset by mid-cap exposure.

Concentration Risk

Concentrated small-cap exposure amplifies risks from sector shocks like manufacturing slowdown or regulatory tightening, mitigated by disciplined position sizing.

Specific Strategy Risk

Competitive pressures or earnings misses could impair scaling for high-growth small-caps, requiring rigorous fundamental monitoring.

Strategy Details

A closer look at the investment thesis, portfolio construction, and current holdings.

Core Investment Theme

Provides exposure to India's entrepreneurial energy before institutional capital discovers it. Small caps offer the highest growth potential but demand patience through volatility cycles. The long-term impact is dramatic wealth creation—historical data shows sustained small-cap investing has generated life-changing returns, but requires conviction to stay invested through sharp drawdowns.

Broader Market View

Market Outlook

Equity markets appear to be entering a recovery phase following the recent valuation correction. Consumption and earnings normalization, coupled with a revival in capital expenditure and credit growth, are aligning favorably with the strategy's tilt towards consumer, financial services, and technology sectors. While competitive pressures and margin cyclicality pose risks, the present environment offers an attractive entry point.

Why This Strategy is Attractive Now

The strategy seems well-positioned to capitalize on the current market dynamics. Its balanced exposure across consumer cyclicals, defensives, financials, and technology appears aligned with key beneficiaries of the unfolding recovery. The portfolio's diversification across approximately 70 holdings, including market leaders, coupled with its moderate beta and risk-adjusted approach, could allow for an attractive risk-reward profile in this environment.

Investment Style & Process

Investment Style

The portfolio exhibits characteristics of a Quality Growth strategy, emphasizing companies with durable competitive advantages, robust profitability, and consistent earnings growth across market cycles.

Why it Makes Sense

In the current environment of moderating economic growth and elevated uncertainty, a Quality Growth approach focused on market-leading franchises with pricing power and resilient business models could provide a degree of defensiveness.

High-Level Investment Process

Sourcing: The strategy appears to source investment ideas through a bottom-up, fundamental research process evaluating companies' competitive positioning, management quality, and long-term growth prospects. Selection: Security selection likely emphasizes companies with sustainable competitive advantages, strong balance sheets, high returns on capital, and attractive reinvestment opportunities. Construction: Portfolio construction suggests an emphasis on prudent diversification across sectors while allowing high-conviction ideas to drive performance.

Portfolio Holdings Overview

SectoralAllocation

Capital Goods33.82%

Consumers43.76%

Financial Services8.72%

Technology2.48%

Utilities0.04%

Services11.19%

Geographic Allocation

Domestic100%

Top Stock Holdings

CompanySectorAllocation

Treps / Reverse Repo InvestmentsUtilities6.54%

Lumax Auto Technologies LtdConsumers6.16%

Thangamayil Jewellery LtdConsumers3.76%

Kirloskar Oil Engines LtdCapital Goods3.27%

Welspun Corp LtdCapital Goods2.92%

Jubilant Ingrevia Ltd Ordinary SharesCapital Goods2.49%

Sansera Engineering LtdConsumers2.40%

Dodla Dairy LtdConsumers2.38%

LT Foods LtdConsumers2.37%

Triveni Engineering & Industries LtdConsumers2.28%

Fund House Management

The asset management company’s track record, AUM scale, and fund manager credentials.

Fund Manager Track Record

Vinit Sambre

Mr. Vinit Sambre has experience of 18 years. Manages 17 funds at DSP Asset Managers Private Limited with an AUM of approximately ₹17,010 Cr Holds a B.Com degree.

18 years

Combined Team Experience

₹ 17,010 Cr

Assets Under Management

CW Expert Take

DSP operates with a legacy of principled investing spanning decades. They maintain a research-driven culture with low portfolio churn, whether managing equity portfolios or fixed income strategies. The fund house is known for transparent communication and staying true to fund mandates even during difficult performance periods.

Firm Overview

Total AUM₹2,20,762.56 Cr

Investment Philosophy & Approach

Disciplined Approach

The fund adopts a disciplined investment approach focused on growth-oriented companies.

Long-Term Perspective

The strategy emphasizes a long-term perspective, holding quality companies for extended periods.

Rigorous Research

Rigorous bottom-up research identifies companies with durable competitive advantages and strong fundamentals.

Operational & Regulatory Details

What it costs to invest, transaction mechanics, and regulatory disclosures you should know.

Costs and Fees

Total Expense Ratio (TER)1.71%

Exit Load1

Regulatory & Tax Information

INF740K01797

ISIN

DailyDealing Frequency

Nifty Smallcap 250 TR INRBenchmark

LTCG | >1Year 12.5%% on gain above 1.25 Lakh

STCG | <1Year 20%%

Tax Implications (India)