DSP BlackRock's successful microcap fund completed 10 years during which its asset under management has grown stupendously from Rs 300 crore to Rs 6000 crore with a 10 year compounded annual growth rate (CAGR) of 19 percent versus benchmark of 7 percent.
Agreeing that the microcap fund for the house has been a huge success, Vinit Sambre, VP & Fund Manager, DSP BlackRock said it was due to their ability to identify companies ahead of time and have faith in those companies for longer time.
The only important thing to note while investing in microcaps is that investors should have a long-term view, he said in a interview to CNBC-Tv18.
When asked if they would again look at opening a microcap fund in near future, he said the fact is that there are good companies but the valuations are not comfortable currently – valuations with a time frame of one-year. However, with a timeframe of 2-3 years good returns will be generated.
Most companies today that are attractive are not cheap and what is cheap like PSU banks, Pharma, IT, people are scared to invest in them because of the headwinds faced by them.
Meanwhile, within the chemical space, the house is positive on the speciality chemicals space from a 3-4 years point of view.
Talking about the capital goods, construction space, he said order inflows for infra companies need to be converted into positive cash inflows. They are positive on cement space because they have started witnessing the benefits of the capex momentum. So next 3-5 years look good for them although valuations are a bit high.For the entire discussion, watch video