MF Stress Test Report are Out, What Investors Must Know?

Nippon India Small Cap Fund, the largest small-cap scheme in India holding assets worth Rs 46,000 crore, would need approximately 27 days to sell off 50% of its portfolio, according to recent stress test report. This stress test outcome aligns closely with similar evaluations conducted for other major small-cap funds.

Several fund management companies released the results of stress tests for their small-cap and mid-cap funds on the evening of March 14.

Axis Small Cap Fund, one of the top 10 small-cap funds with assets worth Rs 19,606 crore, indicated that it would take around 28 days to liquidate 50 % of its portfolio.

Similarly, DSP Small-Cap Fund, boasting an asset base of Rs 13,703 crore as of February's conclusion, revealed that it would require approximately 32 days to sell off 50% of its holdings. Whereas Quant Mutual Fund's small-cap scheme, the liquidation of 50% of its assets would take about 22 days.

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Diversification of MF portfolio

Regarding portfolio diversification, Nippon India Small Cap allocated 13.46%  to large-cap stocks, 14.65%  to mid-cap stocks, and 67.49% to small-cap stocks, with a cash holding of 4.40%.

In contrast, Nippon India Growth Fund held a cash allocation of 1.3% with 18.40%  in large-cap stocks, 66.71% in mid-cap stocks, and 13.53% in small-cap stocks.

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