DSP Flexicap Fund - Jun 2021
DSP Flexicap Fund - Jun 2021
DSP Flexicap Fund - Jun 2021
June 2021
FRAMEWORK TO
IDENTIFY COMPANIES
Business Strength
Management Quality
Growth prospects
Flexi Cap fund aims at investing in quality businesses with good growth prospects
Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards. The strategy/investment approach 2
mention above currently followed by the Scheme and the same may change in future depending on market conditions and other factors.
Why invest in the DSP Flexi Cap Fund?
Seeks opportunities
across the market
LONG TERM EQUITY No need for investor to CLEAR ROLE IN OVERALL
INVESTMENTS decide on large/ ASSET ALLOCATION
mid/small cap allocation
Documented investment
Owns high quality
framework gives clarity
companies with good
on what to expect
growth prospects.
Easy to fit into overall
Buys and holds for the
asset allocation plan of
long term
the investor
CORE EQUITY
PORTFOLIO
ALLOCATION
Suitable for the core long term equity allocation in an investment portfolio
3
Investment Philosophy
Tactical Competitive
Growth Business portfolio positioning of quality
businesses
Core Stock
portfolio prices
Management
Framework for identifying Core portfolio of quality businesses Use market corrections to add to
quality businesses based on long term themes quality business at lower prices
Buy quality businesses, stay invested and use market corrections to average down costs
4
Investment Framework (Business – Management – Growth)
1st of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Business
Source: Internal. 5
Investment Framework (Business – Management – Growth)
Capital allocation
directly influences
growth
Capital allocation
Focus on core business
MANAGE - Unrelated
Business diversification can
Model MENT destroy value
2nd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Management
Source: Internal. 6
Investment Framework (Business – Management – Growth)
Converting potential
opportunity into a real
business
Competency and
Perseverance
Manage - GROWTH
ment
3rd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Growth
Source: Internal. 7
Investment Framework - Portfolio construction
CORE ~ 75 – 80% in
DETERMINE Aspirational structural themes
country like India ALLOCATION
LONG TERM ~ 20-25% in
dependent on TO
STRUCTURAL per capita tactical ideas
STRUCTURAL
income growth with turnaround
THEMES THEMES triggers
Diversified
DIVERSIFY MAINTAIN portfolio
No. of stocks=>
STOCK ~ 50-70 MARKET CAP ~ 60-70% large
Control portfolio cap stocks
WEIGHTS IN BALANCE IN
volatility ~ 30-40% Mid &
PORTFOLIO PORTFOLIO Small stocks
Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards. 8
Investment team
FUND MANAGER
Atul Bhole – Managing fund since June 2016 Abhishekh Ghosh– Managing the fund
• Atul is also the co-Fund Manager for the DSP Equity & Bond
since 01 Jan 2021
fund and the DSP Dynamic Asset Allocation Fund. • Over 13 year experience in equity
• Atul has over 14 year of experience in fund management research
and equity research with Fund management experience
since 2011 • Joined DSPIM in Sep 2018 as midcap
analyst. Prior experience of working
• Joined DSP Mutual Fund in May 2016 as VP – Investments. with Motilal Oswal in their institutional
Previous work experience with Tata Asset Management
equities division
(Feb 07 – Apr 16), JP Morgan & SBI treasury
• Masters in Mgmt. Studies from JBIMS and has cleared his • Masters in Management Studies from N
CA exam L Dalmia Institute and has graduation in
Electronic Engineering.
Kaushal Maroo (11) Dhaval Gada (10) Chirag Dagli (19) Suryanarayanan
AVP, Autos, Ancillaries, AVP, Banking and VP, Healthcare Manian, CFA (10)
Cement Financial Services VP, Tech, Telecom,
Media, FMCG
ROLLING RETURNS
1 YEAR ROLLING RETURNS (%) 3 YEARS ROLLING RETURNS(%) 5 YEARS ROLLING RETURNS (%) 10 YEARS ROLLING RETURNS (%)
DSP Flexi Cap DSP Flexi Cap DSP Flexi Cap DSP Flexi Cap
Nifty 500 TRI Nifty 500 TRI Nifty 500 TRI Nifty 500 TRI
Fund Fund Fund Fund
Average Annual Returns 24.5 19.2 19.5 15.5 19.9 15.9 20.0 15.6
Median Annual Returns 15.6 12.8 15.1 12.5 16.0 14.0 20.2 16.1
Minimum Annual Returns -54.0 -59.5 -26.9 -21.7 0.9 -1.5 7.2 5.0
Maximum Annual Returns 154.1 154.3 85.3 69.4 64.5 51.3 33.4 26.5
Returns / Risk 1.11 0.82 0.89 0.66 0.91 0.68 0.91 0.67
POINT-TO-POINT RETURNS
TIME PERIOD DSP Flexi Cap Fund Nifty 500 TRI ALPHA
1 year 60.3 60.8 -0.5
3 years 18.1 15.0 3.1
5 years 16.9 15.4 1.5
10 years 13.8 12.8 1.0
Since Inception 19.7 14.9 4.8
Source: MFIE; Rolling Returns are since inception till Jun 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option. Standard Deviation
of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes managed by same Fund Manager. Past
performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for performance of the index should not construe as
returns/performance of the Scheme. It is not possible to invest directly in an index.
DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods
10
Performance Scorecard
10.0
5.0
0.0
1 yr RR 3 yr RR 5 yr RR 10 yr RR
0.40
0.20
0.00
1 yr RR 3 yr RR 5 yr RR 10 yr RR
DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods
Source: MFIE; Rolling Returns are since inception till Jun 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option.
Standard Deviation of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes
managed by same Fund Manager. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for
performance of the index should not construe as returns/performance of the Scheme. It is not possible to invest directly in an index.
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Portfolio details – sector exposures
Sectors Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21
Materials 12.8% 13.0% 14.6% 15.6% 11.9% 11.3% 10.3% 11.5% 16.8% 15.8% 15.9%
Industrials 10.0% 18.9% 17.6% 16.6% 15.9% 13.6% 10.4% 7.4% 6.2% 7.1% 8.4%
Consumer Discretionary 14.3% 10.8% 11.3% 12.6% 15.0% 12.1% 9.4% 10.4% 10.0% 7.8% 12.2%
Consumer Staples 4.9% 5.7% 7.4% 4.7% 7.3% 8.2% 10.2% 7.7% 6.8% 5.8% 6.0%
Healthcare 7.6% 6.7% 2.1% 4.1% 6.4% 7.2% 6.9% 7.7% 6.4% 6.7% 6.4%
Financials 25.3% 25.5% 31.8% 27.9% 32.0% 34.3% 40.4% 41.1% 34.0% 34.8% 36.4%
Information Technology 8.5% 5.6% 3.6% 3.8% 7.4% 8.2% 8.7% 4.4% 4.8% 9.7% 7.4%
Utilities 2.9% 5.0% 3.7% 4.9% 1.2% 0.8% 1.0% 3.3% 3.9% 4.2%
Total Equity 96.4% 98.3% 98.8% 96.1% 98.0% 95.7% 97.3% 98.2% 96.5% 99.5% 99.4%
Significant exposure in Financials, Materials and Consumer discretionary sector during Atul’s tenure
Source: Morningstar; GICS Classification has been considered for sectoral break-up. Portfolio data as on Jun 30 2021. The sector(s)/stock(s)/issuer(s) mentioned in this note do not
constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer | More than 10% allocation highlighted in Orange
and more than 5% allocation highlighted in grey
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Portfolio details – concentration and market cap trends
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Mar-18
Dec-19
Sep-16
Dec-16
Mar-17
Sep-17
Dec-17
Sep-18
Dec-18
Mar-19
Sep-19
Mar-20
Sep-20
Dec-20
Mar-21
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Mar-17
Sep-16
Dec-16
Sep-17
Dec-17
Mar-18
Sep-18
Dec-18
Mar-19
Sep-19
Dec-19
Mar-20
Sep-20
Dec-20
Mar-21
Top 5 stocks (LHS) Top 10 stocks (LHS) Total No of stocks
Top Sector Top 3 Sector Top 5 Sector
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Mar-19
Sep-16
Dec-16
Mar-17
Sep-17
Dec-17
Mar-18
Sep-18
Dec-18
Sep-19
Dec-19
Mar-20
Sep-20
Dec-20
Mar-21
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Current investment outlook and portfolio positioning
Global Scenario
Strong recovery & reflation KEY SECTORS
expectations for 2021 for global
Financials
economy
KEY RISKS Asset prices may continue to spike up, Materials
which may cause bigger drawdowns Healthcare
on any negative event
Consumer
Fiscal Situation Credit issues Discretionary
Indian Government fiscal situation Credit quality has worsened due to
worsened but relatively fine vs. Covid-19, but banks have largely
many other countries. provided for it.
Can improve going forward due to
Possibility of pick-up in credit growth
growth inflation dynamics.
next year can soothe the issues
further.
Positioning the portfolio to capture an economic recovery
Source: Internal.
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Background & Rationale for reclassifying DSP Equity Fund
[Title
from to come]
Multicap to Flexi Cap category
[Sub-Title to come]
SEBI CIRCULARS
Oct 06, 2017
Based on SEBI circular on Categorization and Rationalization of Mutual Fund Schemes, DSP Equity Fund was categorized under Multi cap
category having flexibility to invest across Large cap, Mid cap & small cap companies without any limits.
Sep 11,2020
However, in order to keep Multi cap category true to its label, SEBI came out with circular on Asset Allocation of Multi Cap Funds
providing minimum allocation limits. Accordingly, Multi cap fund will need to have atleast 75% in equity & equity related securities with
following minimum limits
• Large Cap companies – Atleast 25% holding
• Mid Cap companies – Atleast 25% holding
• Small Cap companies – Atleast 25% holding
Nov 06,2020
- SEBI introduced a new category “Flexi Cap” which provides flexibility to Fund manager to decide allocation to Large, Mid & small cap
companies without any sub-limits.
- SEBI has also provided option to convert existing scheme into flexi cap category and accordingly scheme name should reflect the
category
1. Continue under Multi cap category and comply with SEBI circular dated Sep 11, 2020 by making requisite changes to the
portfolio to adhere to the allocation limit & various other regulatory requirements
2. Change classification to Flexi cap category by changing name to DSP Flexi Cap Fund without having to make any changes to
the portfolio
DSP proceeded with Option 2 and changed classification of DSP Equity Fund to Flexi cap category.
(Rationale for change is explained in subsequent slide)
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Rationale for going with Flexi cap category instead of Multicap category
DSP Equity fund over its past 23 years history has always been managed as flexi cap without any limit on
market capitalisation
In order to keep fund management style consistent over the years and make past performance comparable,
it became important to classify the fund to Flexi cap category having no allocation limits
90%
80%
10%
0%
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Disclaimer & Product Labeling Details
In this material DSP Investment Managers Private Limited (the AMC) has used information that is publicly available, including information developed in-house. Information gathered
and used in this material is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. The
data/statistics are given to explain general market trends in the securities market, it should not be construed as any research report/research recommendation. We have included
statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such
expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated
with our expectations with respect to, but not to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on
our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or
other rates or prices etc. The sector(s)/stock(s)/issuer(s) mentioned in this presentation do not constitute any research report/recommendation of the same and may or may not
have any future position in these sector(s)/stock(s)/issuer(s). The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the
scheme. Please refer to the SID for investment pattern, strategy and risk factors. Past performance may or may not sustain in future and should not be used as a basis for
comparison with other investments. All figures and other data given in this document are as on Jun 30, 2021 (unless otherwise specified) and the same may or may not be relevant in
future and the same should not be considered as solicitation/ recommendation/guarantee of future investments by the AMC or its affiliates. Investors are advised to consult their own
legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of DSP Mutual Fund. For scheme specific
risk factors and more details, please read the Scheme Information Document, Statement of Additional Information and Key Information Memorandum of respective Scheme
available on ISC of AMC and also available on www.dspim.com. For Index disclaimer click here
The strategy mentioned has been currently followed by the Scheme and the same may change in future depending on market conditions and other factors. Large-caps are defined as top 100 stocks on
market capitalization, mid-caps as 101-250 , small-caps as 251 and above.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
*Investors should consult their financial advisors if in doubt about whether the Scheme is suitable for them.
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