STRESS TESTS BY FUND HOUSES Top six smallcap MFs to take over 20 days to liquidate 50% portfolio

The country's six largest smallcap schemes would require more than 20 days to liquidate half of their holdings, despite most of them maintaining high cash levels and having considerable exposure to more liquid largecap stocks, stress tests conducted by fund houses reveal.

-  ABHISHEK KUMAR

For midcap funds, the time required to sell half of the assets of the top six schemes varies between seven and 34 days, according to disclosures made by asset management companies.

The Securities and Exchange Board of India (Sebi) had called for such tests in the face of strong inflows into smallcap and midcap funds, despite concerns over high valuations, to keep investors better informed.

SBI MF, which manages the third-largest smallcap scheme with a corpus of ₹25,500 crore, estimates it would need 60 days to sell half of the assets of the fund and 12 days to liquidate a quarter of it.

However, the fund house is confident that the scheme can handle a surge in redemptions, if any.