Fund pick: DSP Equity Fund is a consistent multi-cap outperformer

The fund has consistently outperformed the benchmark (Nifty 500 TRI) and its peers in all the trailing periods under analysis.

The DSP Equity Fund has featured in the top 30 percentile of the multi-cap funds category of CRISIL Mutual Funds Ranking (CMFR) for seven quarters ended September 2020. The fund is managed by Atul Bhole since June 2016. The month-end assets under management (AUM) of the fund increased to Rs 3,819 crore in October 2020, from Rs 2,498 crore in November 2017.

The investment objective of the scheme is to generate long-term capital appreciation from a portfolio that is substantially constituted of equity securities and equity-related securities of issuers domiciled in India.

Trailing returns

The fund has consistently outperformed the benchmark (Nifty 500 TRI) and its peers (funds ranked under the multi-cap funds category in September 2020 CMFR) in all the trailing periods under analysis. An investment of Rs 10,000 in the fund on June 7, 2007 (inception of the regular plan of the fund), would have grown to Rs 48,058 on December 2, 2020, at an annualised rate of 12.33 per cent, as compared with the category and the benchmark, which would have grown to Rs 42,009 (11.22 per cent per annum or pa) and Rs 36,480 (10.06 per cent pa), respectively.

Systematic investment plan (SIP) is a disciplined mode of investing offered by mutual funds through which one can invest a certain amount at regular intervals. A monthly investment of Rs 10,000 for the last 10 years in the fund, totalling Rs 12 lakh would have grown to Rs 23.85 lakh (13.36 per cent annualised returns), compared with Rs 22.34 lakh (12.11 per cent annualised returns) in the benchmark as on December 2, 2020.

Portfolio analysis

Over the past three years, the fund has been diversified across market caps while maintaining a predominant allocation to large-cap stocks. The fund maintained an average 66.7 per cent allocation to large-cap stocks. Exposure to mid- and small-cap stocks averaged 18.15 per cent and 12.3 per cent, respectively, during the period.  

The portfolio was diversified across 28 sectors over the past three years. Banks had the highest average allocation of 20.37 per cent, followed by finance (14.75 per cent), consumer non-durables (8.52 per cent), cement (6.23 per cent), and software (5.85 per cent).

The fund took exposure to 125 stocks over the past three years. Bajaj Finance, HDFC Bank, ICICI Bank, and Divis Laboratories have been the highest contributors to the fund’s performance during the period and were also consistently held. Other major contributors include Tata Consultancy Services and Ipca Laboratories.