The median fund could sell half its book in under a week. But the biggest, most popular funds would take one to three months. And as money has poured in, that slow tail has got slower. The number you want is not the category average. It is your fund, tracked over time.
Look up your fund #
How the number is actually built #
Most pages reprint the raw header and move on. Decoded, the test makes two assumptions and one exclusion.
1. It ignores the hardest fifth. Before counting, the bottom 20% least liquid stocks are dropped. So the very holdings that would jam in a sell off are left out, which means the published figure understates the real squeeze.
2. It assumes a 10% participation rate. The fund assumes it can sell only 10% of a stock's three month average daily traded volume on the NSE and BSE.
3. It assumes a 3x volume spike. A separate stress assumption that markets trade at roughly three times normal volume. This is not the 10% tripled and it is not a three day window.
Selling is then modelled pro rata across the top 80% of holdings. Fund houses are not actually required to sell that way. It is a modelling convention for equal treatment. So read the figure as indicative, not a forecast.
Why this exists #
In late February 2024 AMFI, acting on a SEBI direction, told fund houses to do two things. One letter dated 27 February flagged froth building in the small and mid cap segments and asked them to protect investors who stay from those who rush to redeem first. A second letter dated 28 February required the monthly stress test, first published on 15 March 2024. Days later a small cap correction wiped out more than 80 billion dollars of market value in under two weeks. The test is the regulator's answer to a simple worry. If everyone heads for the exit at once, how long is the queue.
What a high number does and does not tell you #
A high days to liquidate number means the fund holds positions that would take longer to exit if many investors redeemed at once in a stressed market. It is a relative liquidity signal, best read by comparing funds in the same category and watching the trend.
It does not predict a crash. It does not tell you returns. And because it excludes the least liquid fifth, it understates rather than overstates. For a long horizon SIP investor who is not redeeming in a panic, the headline number has limited direct personal impact. Its real use is spotting a fund whose liquidity is quietly deteriorating as its assets swell, and comparing one fund's discipline against its peers.
Everything, dated and explained. We still won't tell you to buy it.
This page explains a public regulatory disclosure for education. It is not investment advice and not a recommendation to buy, sell or switch any fund. FinSet is an AMFI registered mutual fund distributor, ARN 180462. Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Sources. Data from AMFI's stress test and liquidity analysis disclosure for mid cap and small cap funds, published monthly by the 15th and refreshed here monthly, figures as of the date shown. Methodology per the AMFI standard stress test template, which specifies 10% participation volume of three month daily average traded volumes on both the NSE and BSE with three fold volumes, the bottom 20% of the portfolio excluded on scrip liquidity and pro rata liquidation of 25% and 50% of the portfolio. Regulatory timeline per two AMFI best practice communications to fund houses in late February 2024. The 27 February letter is AMFI Mem. Cor. 35P/MEM-COR/116/2023-24, issued on a SEBI direction, requiring a policy to protect the interest of investors in mid cap and small cap funds. AMFI issues these as letters to fund houses rather than as public circulars, so the 28 February letter that set the stress test carries no public reference number. Its terms are as reported by Business Standard and Business Today and as borne out by the disclosure itself, first published on 15 March 2024 and running monthly since, current as of July 2026. March 2024 correction figure per Bloomberg, 14 March 2024.
FinSet keeps mutual fund disclosures dated, decoded and in one place. The weekly email carries what changed, with no buy or sell call.
Get the weekly emailCommon questions #
Is a 60 day number bad?
Not on its own. It says half the portfolio would take about 60 trading days to sell under the model's stressed assumptions. Compare it to other funds in the same category and to the same fund six months ago.
Is the data published every 15 days?
No. It is monthly, by the 15th, on the prior month's portfolio. Several sites still call it fortnightly. It is not.
Does this mean my money is locked?
No. It is a what if model for a mass redemption event, not a statement about your own withdrawal.