Fwd: Small Cap Fund to reopen for lump sum investments
Smart investors know that buying low, selling high and following the fundamental principles of investing, including what famed investor Warren Buffet, once said "Be greedy when others are fearful", are difficult steps to keep in mind. Price lows generally occur in deeply troubling times and this is when most investors tend to struggle with the will to invest rationally.
Since 2017, when we decided to close inflows into the DSP Small Cap Fund due to expensive valuations, the market has moved a full circle from extreme optimism to the current extremely pessimistic scenario. However, the history of financial markets shows that they do rebound.
While the current unprecedented sell-off in the market has improved valuations, once there is any evidence of a way to combat COVID-19, stock prices will start building optimism. Hence, it is important to look beyond the 'right now'. It is important to start investing in good companies that have the ability to survive this downturn while providing long-term wealth creation opportunities. We are not fortune tellers and cannot predict whether we have hit a sustainable market bottom or if more pain and volatility will ensue. However, our near-term plan remains the same. We are tactically adding more exposure at current valuations and encouraging our investors to follow suit, liquidity permitting.
DSP Small Cap Fund is in a good position today to start capitalizing on such opportunities. Therefore, we are reopening the Scheme to accept lump sum investments with effect from April 1st, 2020. This is in addition to the SIP & STP investment route, that has been open for a while. All other provisions of the Scheme Information Document, Key Information Memorandum('KIM') of the Scheme and Combined KIM shall remain unchanged.
Please read our detailed note on why we feel this is a good time to reopen for lumpsum investments: Download