DSP BlackRock Small and Midcap Fund

DSP BlackRock Small and Midcap Fund is managed by Mr. Apoorva Shah and Mr. Vinit Sambre. The scheme aims to generate long term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities, which are not part of the top 100 stocks by market capitalization. The fund has consistently topped the charts in most years since its inception. This is a good fund to hold on to for the short term needs.

Where does DSP BlackRock Small and Midcap Fund invest your money?

DSP BlackRock Small and Midcap Fund is a equity fund with mid cap bias fund. About 71.8% of the fund’s money is allocated to stocks of medium sized companies, and around 26.82% to stocks of small sized companies. Mid and small cap stocks bring bumper returns as they turn into large cap stocks but this doesn’t happen too frequently.

Suitable for what?
  • Creating wealth
  • Lifestyle needs
Not suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Home Purchase
How has DSP BlackRock Small and Midcap Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Nov 2006, your value of investments would be around Rs 1.25 lakhs. If you had invested Rs 1 lakh for 5 years, your value of investments would be around Rs 1.07 lakhs. The performance has been better than or similar to other large cap mutual funds. The fund has been giving at around 1.40% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in DSP BlackRock Small and Midcap Fund through SIP for the past 5 years today you would have around Rs 8.35 lakhs.

How will DSP BlackRock Small and Midcap Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid-sized companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make DSP Black Rock Small and Midcap Fund as part of your satellite portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Recommended
Our recommendation for existing investment
Recommended
When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

How frequently you need to monitor the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What are the charges applicable?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of DSP BlackRock Small and Midcap Fund is 2.44%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year.

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