The latest stress test for April 2025 shows that some Small Cap Mutual Fund schemes will take as long as 70 days to liquidate 50 percent of the portfolio. Those who are unaware of this, all mutual funds are supposed to make a series of revelations about their middle and small cap schemes in which they investigate the liquidity of portfolios under the stresscenarios for their mid-cap and small cap. These monthly revelations are mandatory according to the SEBI guidelines. Mutual fund houses reveal a number of statistics for their small and mid -capside schemes in this stress test and liquidity analysis. They are supposed to reveal the period they would take to liquidate a significant part of the scheme. It reveals a variety of statistics such as concentration, stress test, volatility and valuation. Stress test and liquidity analysis for April 2025 Small Cap Fund Stress Test (50% of the portfolio) Straw Test (25% of the portfolio) Tata Small Cap Fund 40 20 SBI Small Cap Fund 54 27 Quant Small Cap Fund 70 35 Nippon India Small Cap Fund 30 15 Kotak Small Cap Fund 34 17 icicici Prudential Cleincap Fund 14 7 HDFC Small Cap Fund 47 23 DSP Klein CAP 46 23 Axis Table above shows that Tata Small Cap Fund will take 40 days to liquidate 50 percent of its portfolio and 20 days for 25 percent of the portfolio on a pro -rata. Meanwhile, the 20 percent of the least liquid effects of the portfolio, while the time it takes to liquidate a portfolio on a pro-rata base are overlooked. The risky small cap fund, based on the above table, is Quant Small Cap Fund, which will take 70 days to liquidate 50 percent of the portfolio and 35 days to liquidate 25 percent of the portfolio. HDFC Small Cap Fund will take 47 days to liquidate 50 percent of the portfolio, while 23 days liquidate 25 percent of the portfolio. At the same time, DSP Small Cap Fund will take 46 days to liquidate 50 percent of the portfolio and Axis Small Cap Fund will take 26 days to liquidate 50 percent of the portfolio. What is a tension test? According to SEBI guidelines, mutual funds are supposed to investigate the liquidity of portfolios under stresscenarios for their mid-capitalization and small cap funds. The stress test shows the number of days it would take to liquidate 25 percent and 50 percent of the portfolio in the event of a stress event. The fund houses are also supposed to reveal the percentage of assets that these schemes have assigned to ‘cash’ to meet the redemption requests. The data in April shows that Axis Small Cap Fund allocated 12.30 percent of assets to cash and Icici Prudential Smallcap Fund, 13.31 percent of its assets in cash. Visit here for all personal finance updates.
The latest stress test shows it about mutual small cloth funds. Check out details here | Mint
