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DSP Mutual Fund earlier known as DSP BlackRock Mutual Fund was a joint venture between two big financial players — DSP, a 150- year old financial firm based in India and BlackRock, the world’s largest investment management firm. In May 2018, the DSP Group bought out the 40% stake of BlackRock in DSP BlackRock Mutual Fund and subsequently, the new entity was renamed DSP Mutual Fund. A leading AMC in India, DSP BlackRock had total AUM of more than Rs 98,566 crores as of 31st August 2018.
DSP Mutual Fund offers schemes across the key categories of equity, debt and hybrid while also offering specialised schemes in the ETF and international funds segments. Some of the leading schemes offered by DSP Mutual Fund to its investors include DSP Liquidity Fund, DSP Equity & Bond Fund, DSP Credit Risk Fund, DSP Equity Opportunities Fund and DSP Midcap Fund. In August 2018, DSP MF announced that it would allow SIP into the DSP Small Cap fund for a limited period of time having stopped inflows into this popular scheme approximately 2 years ago.
Key management team members of DSP Mutual Fund include Aditi Kothari Desai as Director & Head – Sales & Marketing; Pankaj Sharma as CIO – Fixed Income; Ramamoorthy Rajagopal as Chief Operating Officer; and Kalpen Parikh as President. Read the exclusive Paisabazaar.com interview of Kalpen Parikh.
The following are the key types of mutual fund schemes offered by DSPMF to its investors:
Equity schemes are required to invest a major portion of their total assets (65% or more) in equities and equity derivatives of listed and/or unlisted companies. The following are the key types of equity funds offered by DSP Mutual Fund:
a. Large Cap Fund: The large cap fund offered by DSPMF typically invests at least 80% of assets in equities/equity derivatives of large cap companies. Example – DSP Top 100 Fund.
b. Large and Medium Cap Fund: This type of scheme offered by DSP Mutual Fund invests no less than 35% of assets in large cap equity/equity derivatives along with at least an additional 35% of assets in mid cap equity/equity derivatives. Example – DSP Equity Opportunities Fund.
c. Midcap Fund: As per SEBI guidelines, midcap schemes of DSP Mutual Fund are mandatorily required to invest no less than 65% of total assets into equity/equity related instruments of mid cap companies. Example – DSP Midcap Fund
d. Small Cap Fund: A small cap fund invests 65% or more of assets into equity and equity-related instruments of small cap companies. Example – DSP Small Cap Fund. This fund, currently managed by Vinit Sambre is one of the most popular DSP MF schemes.
e. Multicap Fund: Multicap funds, also known as diversified equity schemes, can allocate assets across equity/equity derivatives of various capitalisations. These schemes do however need to invest at least 65% of total assets in equity/equity derivatives. Examples – DSP Focus Fund and DSP Equity Fund.
f. ELSS: Tax saver mutual funds also known as equity linked savings schemes (ELSS) invest primarily in equity/equity derivatives (80% or more of total assets). These schemes offer tax saving benefits of up to Rs. 1.5 lakhs annually u/s 80C of the Income Tax Act, 1961 and feature a 3 year lock-in period. Example – DSP Tax Saver Fund.
g. Sectoral/Thematic Fund: These mutual fund schemes focus their equity and equity-related investments in companies belonging to a specific sector or theme such as infrastructure, energy, etc. Examples of thematic/sectoral schemes of DSPMF are – DSP T.I.G.E.R. Fund and DSP Natural Resources and New Energy (NRNE) Fund.
Debt funds of DSP Mutual Fund invest in various debt and money market instruments such as treasury bills (T-Bills), government securities (G-Secs), corporate bonds, certificate of deposits (CDs), collateralized borrowing and lending obligations (CBLOs), etc. Types of debt schemes offered by DSPMF belong to the following key categories:
a. Liquid Fund: This type of debt fund exclusively invests in debt securities and money market instruments with maturity of 91 days or less. Example – DSP Liquidity Fund.
b. Money Market Fund: This type of scheme from DSP Mutual Fund almost exclusively invests in money market instruments with maturity of 1 year or less. Example – DSP Savings Fund.
c. Ultra-Short Duration Fund: Ultra short duration funds from DSPMF invest primarily in money market/debt instruments such that the resulting portfolio features Macaulay Duration of 3 to 6 months. Example-DSP Ultra Short Term Fund.
d. Low Duration Fund: These are debt funds whose portfolio comprises money market/debt investments with Macaulay Duration extending from 6 months to 1 year. Example- DSP Low Duration Fund.
e. Short Duration Fund: This type of debt scheme from DSP Mutual Fund features a portfolio of debt and money market instruments such that the Macaulay Duration of the scheme’s portfolio ranges between 1 and 3 years. Example – DSP Short Term Fund.
f. Medium Duration Fund: When a debt fund features a portfolio of debt and money market instruments with Macaulay Duration between 3-4 years, it is termed as a medium duration fund. Example – DSP Bond Fund.
g. Gilt Fund: A gilt fund from DSP Mutual Fund has to invest no less that 80% of available assets in Government Securities (G-Secs) of varying maturities. Example – DSP Government Securities Fund.
h. Gilt with 10 Year Constant Duration Fund: This is a special type of gilt fund in which not only invests at least 80% of scheme assets in G-Secs, but also comprises a portfolio with Macaulay Duration equal to 10 years. Example – DSP 10 Year G-Sec Fund.
i. Banking and PSU Fund: This type of DSPMF debt scheme invests no less than 80% of total assets in debt instruments of public financial institutions, public sector undertakings and debt instruments of banks. Example – DSP Banking & PSU Debt Fund.
j. Corporate Bond Fund: This type of debt scheme is required to invest at least 80% of total assets in corporate bonds featuring the highest ratings. Example – DSP Corporate Bond Fund.
k. Credit Risk Fund: A credit risk type of debt fund invests no less than 65% of total assets in corporate bonds rated below the highest ratings in the market Example – DSP Credit Risk Fund.
l. Dynamic Bond Fund: These debt schemes have the flexibility to invest in debt and money market instruments of varying maturities. Example – DSP Strategic Bond Fund.
By definition, hybrid mutual funds are required to invest in both equity/equity derivatives and debt/money market instruments. The allocation across these asset classes tends to vary from one type of hybrid scheme to another. The following are the key types of hybrid schemes on offer from DSP Mutual Fund:
a) Arbitrage Fund: As per SEBI guidelines, this type of hybrid scheme from DSP Mutual Fund is required to invest 65% or more of total assets in equity/equity oriented instruments. This allows the fund to be treated as a equity fund for tax purposes and enjoy favourable tax treatment. Additionally this type of scheme is required to follow an arbitrage strategy of investment. The returns given by these funds are similar to debt funds and the also typically feature a lower risk than equity funds. Example – DSP Arbitrage Fund.
b) Dynamic Asset Allocation Fund: In case of this type of scheme, the portfolio asset allocation towards debt and equity is managed dynamically. In other words, the fund manager shifts between debt and equity depending on market conditions and how attractive each asset class is. An example of dynamic asset allocation fund from DSP Mutual Fund is DSP Dynamic Asset Allocation Fund.
c) Aggressive Hybrid Fund: In case of an aggressive hybrid fund from DSPMF, the scheme’s equity investments are required to range from 65% to 80% while the remainder 20% to 35% of the scheme’s portfolio would be invested in debt/money market securities. This enables the fund to be classed as equity for tax purposes and enjoy favourable tax treatment. Example – DSP Equity & Bond Fund.
d) Conservative Hybrid Fund: A conservative hybrid scheme is primarily debt-oriented and invests between 75 to 90% of total assets in debt and money market securities. The remainder of scheme assets (10-25% of assets) is allocated towards equity and equity derivatives. Example – DSP Regular Savings Fund.
e) Equity Savings Fund: For tax purposes, an equity savings fund managed by DSP Mutual Fund will allocate a minimum 65% of total assets towards equity/equity derivatives. However the effective exposure to equities in the fund will be lower. For example the DSP Equity Savings Fund retains the flexibility to maintain its net long term equity exposure between 20% to 50% depending upon market conditions. Additionally a minimum 10% of portfolio needs to be invested in debt/money market instruments. This type of hybrid scheme can engage in making both hedged and unhedged investments.
These are a unique class of schemes managed by DSP Mutual Fund as the fund manager does not involve himself/herself in actively altering the portfolio allocation of the scheme. An example of this type of scheme is the DSP Liquid ETF, which being an exchange traded fund (ETF) can be traded like an equity stock on exchanges where it is listed. Such schemes have extremely low expenses because they passively track an index.
These schemes from DSPMF provide domestic investors an opportunity to participate in global markets either through direct foreign equity exposure through a domestic mutual fund or a fund-of-fund style investment. In case of fund-of-fund investments, the domestic scheme managed by DSPMF invests in a foreign mutual fund. A minimum 95% of assets need to be invested in a foreign fund for a fund-of-funds (FoF) to be designated as an international fund of funds scheme. Examples of international funds from DSP Mutual Fund and their chosen themes are as follows:
|Fund Name||Investment Route||Invests in|
|DSP US Flexible Equity Fund||International FoF (invests in BlackRock Global Funds – US Flexible Equity Fund Class I2 USD Shares)||Top US companies including Apple, Microsoft, Alphabet, Pfizer, JP Morgan Chase, etc.|
|DSP World Agriculture Fund||International FoF (invests in BlackRock Global Funds – World Agriculture Fund Class I2 USD Shares)||Top global agricultural brands such as Nutrien, Deere& Co., Archer Daniels Midland, Tyson Foods, Yara International, etc.|
|DSP Global Allocation Fund||International FoF (invests in BlackRock Global Funds – Global Allocation Fund Class I2 USD Shares)||Top global brands including Apple, Facebook, Microsoft, Alphabet, Comcast, Williams, Amazon, Johnson & Johnson etc.|
|DSP World Energy Fund||International FoF (invests in BlackRock Global Funds – World Energy Fund Class I2 USD Shares and BlackRock Global Funds – New Energy Fund Class I2 USD Shares)||Top and emerging energy companies worldwide such as Royal Dutch Shell, BP, Chevron, Total, Suncor Energy, Exxon Mobil, etc.|
|DSP World Mining Fund||International FoF (invests in BlackRock Global Funds – World Mining Fund Class I2 USD Shares)||Top mining companies (non-gold) worldwide such as Vale, BHP Billiton, Rio Tinto, Glencore, First Quantum, Teck Resources, etc.|
|DSP World Gold Fund||International FoF (invests in BlackRock Global Funds – World Gold Fund Class I2 USD Shares)||Top gold mining companies worldwide such as Newcrest Mining, Agnico Eagle Mines, Randgold Resources, Newmont Mining, Franco Nevada, etc.|
4th September 2018 – DSP Mutual Fund announces reduction of SIP minimum amounts on all schemes to Rs. 500. Read More about this
29th August 2018 – Kalpen Parikh, President of DSP Mutual Fund, talks exclusively to Paisabzaar.com regarding small cap valuations, DSP Corporate Bond Fund NFO and the way forward for DSPMF. Read the complete interview
24th August 2018 – DSPMF announces that fresh investments will be allowed in DSP Small Cap Fund (earlier DSP Microcap Fund), from September onwards. Initial announcement indicates that only SIP investments will be accepted for a limited period. Read More
23rd August 2018 – DSP Mutual Fund announces new fund offer of the DSP Corporate Bond Fund. Get details of this new debt scheme from DSPMF