DSP Regular Savings Fund

DSP Regular Savings Fund

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  [Title to come] [Sub-Titleto come] Strictly for Intended Recipients Only Date * DSP India Fund is the Company incorporated in Mauritius, under which ILSF is the corresponding share class November 2021 | People | Processes | Performance | Regular Savings Fund
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  2 What is DSPRegular Savings Fund (RSF) Source: Internal. DSP Regular Savings Fund seeks to provide capital appreciation with lower volatility  Participate in equity markets  Provides growth potential  Risk similar to that of an equity fund  Debt and money market securities  Relatively Low volatility  Relatively stable returns Equity 10%-25% (INVITS/REITS 0% to 10%) Debt 75%-90% Debt Taxation Any future allocation to Global Equities will come from this 25%. Debt always > 75%
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  3 Who should notinvest in DSP RSF… Source: Internal. 1. This is not a substitute for a liquid fund 2. We would recommend investor with investment horizon of at least 3 years to consider this fund. 3. The highest Equity allocation for DSP RSF will be 25%. This entails higher volatility in NAVs compared to Short Term Debt/Liquid Funds. Who is this fund suitable for… 1. The fund can generate relatively returns higher than the medium-term debt over 3-to-5-year horizon 2. An investor who already has the desired equity allocation and is already invested in liquid/low risk debt funds for short term requirements but is looking for a potential yield enhancement product on incremental savings can invest in DSP RSF
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  4 Multi Asset Portfolio Equity Debt/REITS/INVITSlbal Equity Objective:Capital Appreciation Objective: DEBT can provide stability and accrual income, REITS/INVITS can end up providing higher yield than DEBT Global Equity<lobal Equity Geographical Diversification Allocation to Global Equities in case risk return are favourable to provide further diversification
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  5 Focus on AbsoluteReturns 1. Focus on limiting the risk of permanent loss of capital 2. Focus on generating absolute return over cycles with good risk/return profile 3. Ideas evaluated on basis on ability to generate Inflation + approximately 10% returns on a long-term horizon based on conservative assumptions 4. Willingness to underperform benchmarks in sharp bull markets due to focus on risk management 5. Relatively concentrated portfolio of about 20 stocks
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  6 Objectives for theFund 1. First Objective: Limit the Risk of Permanent Loss of Capital Diversification Focus on limiting downside risk Conservative portfolio construction Counter Cyclical Allocation 2. Second Objective: Beat Inflation Allocation to Equity can provide capital appreciation Allocation to Invits/Reits can provide higher accrual income Debt can provide accrual income and provide stability to overall portfolio Currency diversification and opportunistic exposure to global equity in due course 3. Third Objective: Beat Benchmark Avoiding large drawdowns and accidents by hedging and counter cyclical positioning in both Debt and Equity
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  7 Counter Cyclical Approach EquityEquity will typically be held between 10% to 25%. This will depend up overall valuations, momentum and sentiment in market and also on how many bottom up ideas are available with sufficient margin of safety. If markets slide, portion of equity portfolio could also be hedged. 1. Conservative when Equity Valuations are High and Aggressive when Equity Valuations are Low Equity fall From Peak Equity Exposure Rest Incremental allocation to equity to get to 25% 0% 25% 75% 0% 20% 21% 78.9% 3.9% 50% 14.3% 85.7% 10.7% 2. Falling share of Equity in a Hybrid Fund as market falls leads to auto rebalance mechanism where the Fund buys more equity in event of sharp falls Debt Yields High Yields Low Moderate Duration Portfolio (3 to 5 Years) Low Duration Portfolio (1 year)
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  8 What is therisk/return profile of DSP RSF? DSP Regular Saving Fund’s risk/return profile is similar to a Conservative Hybrid Fund LIQUID / LOW DURATION FUNDS DURATION/ INCOME FUNDS SMALL & MID CAP FUNDS /SECTORAL FUNDS Less risk than equity funds, could earn Greater returns than debt funds RISK MULTICAP FUNDS HYBRID FUNDS DSP REGULAR SAVINGS FUND EXPECTED RETURN
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  9 Debt Portfolio • TheFixed Income portfolio of DSP RSF is positioned to operate like a short-term fund. • Most of the investment is in AAA bonds and Indian Government bonds. • The allocation is to 1 Year – 5 Year bucket. • The objective is to provide investors a potential accrual income with low volatility. • In current uncertain times we are maintaining a balanced portfolio with staggered maturities from 2022 to 2026 which can reduces concentration risk Portfolio YTM 5.11% Modified Duration 2.11 Years Sovereign Bonds 13.83% (of AUM) AAA Corporate Bonds 59.29% (of AUM) As on 30th Nov 2021, Source: Internal Disclaimer: The investment approach / framework/ strategy mentioned herein is currently followed by the scheme(s) and the same may change in future depending on market conditions and other factors.
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  10 Equity: Entry Process Canthe business be held for 10 years? • It means at this point there is no reason to believe we might have to sell before 10 years • Does not mean we will necessarily continue holding for 10 years Are the embedded valuations conservative? • Is the stock available at a price where we can make Inflation + approximately 10% even on conservative expectations of future growth & profitability Yes Yes Is the downside low? • In case of adverse business developments is the downside limited? • We are looking at loss in the intrinsic value of the business not quoted value which could be volatile Long Term Orientation, Typically No Allocation to Cyclicals Value Bias Value = Intrinsic Value - Price Absolute Return Approach BUY Since quality companies are easier to value due to durability of their business, predictability of cash flows, and lower tail risks they usually form a large part of the portfolio. But the portfolio generally has a Value bias and may not have Quality/Growth or Momentum bias. Entry will typically not be from 30% of the most expensive stocks in the market (based on our internal quantitative parameters) Yes
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  11 Valuation Approach Source: Internal LowMultiples, Peak of Business Cycle High Multiples, Peak of Business Cycle Low Multiples, Bottom of the Business Cycle High Multiples, and Bottom of the Business Cycle Business Cycle Valuation Multiples Best Ideas. Possibility of both earnings growth and multiple rerating Multiples look high but should consider normalized earnings. Valuations could still be cheap Exit. Avoid Hold. Track momentum in fundamentals. Valuation multiples should be looked at in context of the Business Cycle
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  12 Equity: Exit Process Source:Internal Is a better risk return available elsewhere? • The best reason to sell Price factoring in overly aggressive assumptions? • Is the stock expected to deliver < Inflation + 5% based on even aggressive assumptions of future growth and profitability Or Was the Thesis Wrong? • Has new information or business developments materially changed the initial hypothesis Or More tolerant of over-valuation in exit decisions (to compensate for value bias in entry)
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  13 Performance Scorecard Source: MFIE;Scheme Benchmark – CRISIL Hybrid 85+15 – Conservative Index. Returns are as on Nov 30, 2021, for Regular plan, Growth Option. Inception date – Jun 11,2004. Click here for scheme performance of above Scheme in SEBI prescribed format and of other schemes managed by same Fund Managers. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. It is not possible to invest directly in an index. POINT-TO-POINT RETURNS Time Period DSP Regular Savings Fund CRISIL Hybrid 85+15 – Conservative Index 1 Year 8.02% 8.47% 3 Year 7.19% 11.11% 5 Year 5.15% 8.87% Since inception 8.74% 8.81%
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  14 Portfolio Positioning Source: Internal.Data as on Nov 30, 2021. The sector(s)/stock(s)/issuer(s) mentioned herein do not constitute any research report/recommendation of the same and the scheme/ Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s). Equity, 18.5 REITs & InvITs, 3.6 Cash & Cash Equivalent, 4.6 Debt, 73.3 Asset Allocation Capitalization % Weight Large cap 13.4% Mid cap 4.4% Small cap 0.5% Equity Profile Debt Quants Parameters Values YTM 5.05% Modified Duration 2.11 AUM in Cr 231 Cr Credit Profile Sovereign 13.9% AAA 59.3%
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  15 Disclaimers & ProductLabelling This document is for information purposes only. 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 statements contained herein may include statements of future expectations and other forward looking statements that are based on prevailing market conditions / various other factors and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. While utmost care has been exercised while preparing this document, the AMC nor any person connected does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The recipient(s) before acting on any information herein should make his/their own investigation and seek appropriate professional advice. The portfolio of the scheme is subject to changes within the provisions of the offer documents of the scheme. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The sector(s)/stock(s)/issuer(s) which are currently part of portfolio do not constitute any research report/ recommendation of the same and scheme/ Fund may or may not have any future position in these sector(s)/ stock(s)/issuer(s). The investment approach / framework/ strategy mentioned herein is currently followed by the scheme(s) and the same may change in future depending on market conditions and other factors. All opinions and data included in this presentation are as on 30 Nov 2021 (unless otherwise mentioned) and are subject to change without notice. There is no assurance of any returns/capital protection/capital guarantee to the investors in this scheme of DSP Mutual Fund. For scheme specific risk factors, load structure, Investment strategy, detailed asset allocation structure and more details, please read the Scheme Information Document and Key Information Memorandum of respective scheme available on ISC of AMC and also available on www.dspim.com. For Index disclaimer click here 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. Scheme Product Suitability Riskometer DSP Regular Savings Fund Benchmark - CRISIL Hybrid 85+15 – Conservative Index DSP Regular Savings Fund (An open ended hybrid scheme investing predominantly in debt instruments) This Scheme is suitable for investor who are seeking* o Income and capital growth over a medium-term investment horizon o Investment predominantly in debt securities, with balance exposure in equity/equity-related securities *Investors should consult their financial advisers if in doubt about whether the Scheme is suitable for them.
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  For Professional Investoruse only #INVESTFORGOOD