Feb 16, 2017 3 min read

DSP BlackRock MicroCap Fund Restricts Fresh Investments

DSP Blackrock Micro Cap Fund stops further investments on a temporary note. Read this blog to know the effects of the same.
DSP Mutual Fund has announced restriction on the fresh investments in its Micro Cap Fund with effect from February 20, 2017. Every action which includes an inflow of capital in the DSP BlackRock Micro Cap Fund, viz., STP, SIP, Lump sum, or Switch-In, shall not be accepted anymore. However, this decision is temporary until the next notice announced by the fund house. Let’s have a look at the complete updates about this latest news.

DSP BlackRock Micro Cap Fund which is one of the best-performing equity diversified schemes in the industry has now become one of the largest funds in its category with an asset size amounting to Rs.4,751.32 as of January 31, 2017. Due to the fund size, it has been believed by the fund manager of the scheme Mr Vinit Sambre that any further inflow of money in the fund would be detrimental to the interest of all the existing investors. On the flip side, the existing SIPs shall continue and will not get affected by this announcement.

This step which has been a surprising news for the current as well as newbie investors is taken because of a major cause. Due to a sharp run-up in the small- and mid-cap shares, it became difficult for the fund managers to identify the stocks for further investments. The mandate of the scheme is to invest in the shares of companies which are beyond the top-300 corporates as per market capitalisation. But now, when the valuations of these companies have started moving up, the opportunities for further investments have been reduced. Accordingly, adding more capital to the fund would have ill-effect on the current values of the units held by the investors.

DSP BlackRock Micro Cap Fund growth online investment has given a return of 42.83% in the past one year to the investors with which it holds a dominating position in its category. The fund manager has promised to continue finding the best investment opportunities for an effective management of the scheme. And thus, the current investors need not worry about their invested capital. Moreover, for the newbie investors, the fund house has recommended investments in another scheme, i.e., DSP BlackRock Small & Mid-Cap Fund. This scheme is managed by the same fund manager i.e., Mr Vinit Sambre who has same investment philosophy for both schemes.

DSP BlackRock Small & Mid-Cap Fund is a 10-year old mutual fund and has generated CAGR at the rate of 16.27% since its inception as against the benchmark (Nifty Free Float Midcap 100), i.e., 12.05%. The portfolio of this scheme largely comprises securities which are ranked between 100-300 as per the market capitalization with a small exposure to securities ranked beyond 300. The scheme has a bottom-up approach of investing similar to DSP BlackRock Micro Cap Fund. The investors must park their funds in this category to earn high-yielding profits on their investments.

So, we can conclude here that with a suspension of future fund inflows in the DSP BlackRock MicroCap Fund is though surprising, it has brought better opportunities for the current investors. On the flip side, the newbie investors have been benefited with a now recommendation in DSP Small & Mid-Cap Fund to enjoy high-yielding returns on their investments. If you too want to earn returns like those offered by the Micro Cap Fund, then you must start your investment in the DSP BR Small & Mid-Cap Fund.

MySIPonline provides you with the ease of investing in the best-performing schemes online with ease. You must start your investments with us to make your portfolio highly productive and return-oriented.