India’s top asset management companies (AMCs) would take up to 60 days to liquidate 50% of their small-cap scheme holdings in case of sudden redemptions, as per stress test results. For mid-cap schemes, the timeframe is up to 34 days. However, many AMCs can complete 50% liquidation in less than 10 days for both segments. Notably, SBI Small Cap Fund requires a maximum of 60 days for 50% liquidation. Stress test outcomes reveal varying liquidation periods for different funds, indicating their preparedness for sudden redemptions. These tests follow SEBI’s concerns about a potential bubble in mid-cap and small-cap segments, prompting AMFI to mandate regular stress testing and publication of results.
Indian Mutual Funds Stress Tests: Liquidation Timelines for Small and Mid-Cap Schemes Revealed
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