It is a test that helps check how quickly small- and mid-cap funds can sell 25% and 50% of their holdings.
SEBI and AMFI are concerned about large amounts of money (Rs 64,000 crore) being pumped into these funds post their stellar run in 2023.
So, regulators have asked AMCs to conduct this test to make investors aware of these funds’ liquidity risks.
Let’s look at the stress test results of the top five largest small-cap funds.
Assets: Rs 46,044 crore, No of days to liquidate 25% of the portfolio: 13, No of days to liquidate 50% of the portfolio: 27
Assets: Rs 28,599 crore, No of days to liquidate 25% of the portfolio: 21, No of days to liquidate 50% of the portfolio: 42
Assets: Rs 25,534 crore, No of days to liquidate 25% of the portfolio: 30, No of days to liquidate 50% of the portfolio: 60
Assets: Rs 19,604 crore, No of days to liquidate 25% of the portfolio: 14, No of days to liquidate 50% of the portfolio: 28
Assets: Rs 17,233 crore, No of days to liquidate 25% of the portfolio: 11, No of days to liquidate 50% of the portfolio: 22
The numbers are as of March 15, 2024. Assets are as of February 29, 2024.