DSP Mutual Fund to reopen DSP Small Cap Fund for SIPs/STPs only

From 3rd September 2018, the DSP mutual fund is going to accept investments through Systematic investment plan (SIP) and Systematic Transfer Plan (STP) in the DSP Small Cap Fund. However, as before the fund will continue to not accept lump-sum investments. Also, large valuations have come across in the small-cap fund. Therefore, there could be volatility over the next one year for the investors to grab the changes made. And this volatility can be conquered by the investors to add to small caps using SIPs.

Since the last 5 years and 10 years period, DSP Small Cap Fund has been consistently performing the best in the small-cap category and has consistent returns of annualized 34% and 20%, respectively.

However, from the last 1 year, the fund performance has been dragged that of peers with the slow return of only 2.3% as compared to 7.4% which is its benchmark of average return.

The BSE Small Cap Index is decreased to 19%. Well, other stocks lose 25-35%. As the economy improves, the earnings prospect for many stocks is going to rise.

dsp

Investment Objective:

The aim of the fund is to seek long-term capital appreciation by investing in a portfolio that is substantially constitutes of stocks of small cap companies.

Biography of Fund manger:

Mr. Vinit Sambre (Co-manager):Mr. Sambre is a B.Com and FCA. Prior to joining DSP BlackRock he was associated with DSP Merrill Lynch Ltd.(Nov 2005 to Jun 2007), IL & FS Investsmart Ltd. (Dec 2002 to Oct 2005), Unit Trust of India Investment Advisory Services Ltd.(Jun 2000 to Dec 2002), Kisan Ratilal Choksey Shares and Securities Pvt. Ltd. (March 1999 to May 2000) and Credit Rating Information Service of India Ltd.(Apr 1998 to Feb 1999).

Mr. Jay Kothari (Co-manager):Mr. Kothari is a BMS and MBA from Mumbai University . Prior to becoming the fund manager in DSPBR he has worked as the Vice President in the equity investments division as well a product strategist in DSPBRIM.

Mr. Resham Jain (Co-manager): Resham joined DSP Investment Managers in March 2016 as Assistant Vice President in Equity Income Team. He has over 9 years of experience. Prior to joining DSP Investment Managers, he worked for B&K Securities (I) Private Limited, Jaihind Projects Ltd & Arvind Ltd.

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Correction in the small-cap segment:

smallWhy did DSP small-cap fund was closed before?

  • Hyper Valuations
  • Limited investment opportunities
  • Massive Inflows

DSP small-cap fund portfolio stats:

PE

The reason behind the re-opening of fund:

  • Post the recent market correction; valuations have become more reasonable for both.
  • Selective stocks within the portfolio
  • Other stocks in the radar.

Current changes to the portfolio:

PORTFOLIO1

  • Overall, it has increased weights in consumer-oriented names to add more stability to the portfolio.
  • Increased sector weights by Auto (3.9%), Chemicals (3%), and Textile (2.5%).
  • Increased concentration in stocks where they have conviction and were available at reasonable valuations.

Performance Chart:

CHART

SIP Performance:

Principal invested: Rs.  10,000 x 121 installments = Rs.  1,210,000

DSP SMALL S&P BSE Sma # NIFTY 50 TR # Gold PPF
Current value Rs.  4,145,243 Rs.  2,728,968 Rs.  2,471,110 Rs.  1,551,982 Rs.  1,931,010
Absolute growth 242.58% 125.53% 104.22% 28.26% 59.59%
Annualized growth 23.40% 15.67% 13.82% 5.02% 9.19%

Rolling Return:

rolling

Top 10 holdings as on 31st July:

TOP 10

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Risk analysis:

Alpha -0.07
Beta 1.05
Downside Risk 22.66
Info Ratio Rel. 0.10
Jensens Alpha 0.28
Max. Drawdown -19.78
Max Gain 51.30
Max Loss -18.69
Negative Periods 11
Positive Periods 25
r2 0.95
Relative Return 0.38
Return 13.77
Sharp 0.34
Sortino 0.28
Tracking Error 4.01
Trenyor 5.98
Volatility 18.70

Note: Past performance of fund does not guarantee the future returns.

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

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