New Product Review: DSP BlackRock Equity Savings Fund
Mon, Mar 14, 2016
Source : Jeni Shukla, Citrus Interactive

NFO Period: March 8, 2016 to March 22, 2016

Equity savings funds are a new variant in the equity mutual fund basket. The latest addition to this category is from DSP BlackRock.

The DSP BlackRock Equity Savings Fund is an open ended scheme. Its portfolio would be a combination of equity, arbitrage and fixed income securities. While the equity portion aims to provide capital growth, the arbitrage portion endeavors to capture mispricing opportunities. Further, the debt portion will provide stability in returns and likely low volatility. The fund would be treated as an equity-oriented fund for the purpose of taxation, which could provide better tax efficiency than debt funds.

Asset Allocation


Equity & Equity related securities


Allocation as a % of total portfolio

65% to 75%;               Of this Equity Derivatives will be 25% to 55*

25% to 35%

*When arbitrage opportunities are available
When arbitrage opportunities are not available the derivatives exposure will be 0 to 45%

The Equity portion will be actively managed and will be diversified with exposure across market caps. There will be no sector bias. The strategy will be a combination of top-down and bottom-up. For the arbitrage portion the fund manager will buy stocks in the cash market and sell futures in the derivatives market, and lock-in gains that are realized on day of expiry of the F&O cycle. The debt portion will have allocation to debt securities across the maturities spectrum with focus on high credit quality.

The scheme will be benchmarked against the Nifty 500 (30%) and Crisil Liquid Fund Index (70%). The options available are Growth (Option A), Dividend (Option B), Monthly Dividend (Option C) and Quarterly Dividend (Option D). SIP is allowed in this scheme with a minimum amount of Rs. 1,000. The exit load would be 1% for a holding period of upto 12 months. There would be no exit load for a holding period beyond 12 months.

DSP BlackRock currently does not have an arbitrage fund in its basket of offerings. This NFO  can be classified as an Equity Savings Fund.  Other funds in the category from other fund houses are HDFC Equity Savings Fund, Kotak Equity Savings Fund, L&T Equity Savings Fund, Reliance Equity Savings Fund and SBI Equity Savings Fund. Of these the funds from Kotak, L&T, Reliance and SBI have monthly and quarterly dividend options.

Past Performance of peer set:


1 Year

3 Years

HDFC Equity Savings Fund(G)



Kotak Equity Savings Fund(G)



L&T Equity Savings Fund(G)



Reliance Equity Savings Fund(G)



SBI Equity Savings Fund(G)









Returns in % as on 13th March, 2016; 3 year returns in CAGR terms
(NA - Not Applicable - for schemes which don't have history corresponding to the time period mentioned)

Fund Managers

The fund will be managed by Vinit Sambre(equity portion) and Marzban Irani (debt portion).

Vinit Sambre has over 16 years of experience in equity research and fund management. Other funds managed by him are DSP BlackRock Micro Cap Fund, DSP BlackRock Small and Mid Cap Fund, Co-Fund Manager for DSP BlackRock Balanced Fund and DSP BlackRock Equity Fund, Equity portion of DSP BlackRock 3 Years Close Ended Equity Fund and all DSP BlackRock Dual Advantage Fund series of DSP BlackRock Mutual Fund.

Marzban Irani has an experience of 14 years. He also manages DSP BlackRock Constant Maturity 10Y G-Sec Fund and DSP BlackRock Short Term Fund

The last three NFOs that were launched by DSP BlackRock are DSP BlackRock Ultra Short Term Fund in February 2015, the DSP Blackrock 3 Years closed ended equity fund in November 2014 and DSP BlackRock Dynamic Asset Allocation Fund in January 2014.


Our View

The fund can be positioned between income and balanced funds in terms of risk profile.

The fund is suitable for investors who wish to reduce portfolio volatility and efficient post-tax returns. Vinit Sambre has a good track record in managing the mid and small cap funds of DSP BlackRock.

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