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DSP BlackRock Opportunities: Rising Multi Cap Fund
Tue, Aug 09, 2016
Source : Yash Jashnani, Citrus Interactive

DSP Black Rock Opportunities Fund is an open ended Multi Cap equity diversified fund. The primary objective of the scheme is seeking to generate long term capital appreciation and its secondary objective is income generation and the distribution of dividend from a portfolio constituted of equity and equity related securities concentrating on the investment focus of the scheme. The fund was launched in May 2000 and is benchmarked against NIFTY 500. The Fund has an AUM of Rs 948 crore as on 30th June 2016 which has increased by Rs 206 crore as compared to last year 30th June 2015.

 

Performance

 

The fund’s performance across various time horizons is very good as seen in the table given below. It has beaten its benchmark throughout the time horizon in all time periods. It has done better than the equity diversified category in the last YTD, 6 months, 1 Year but not in the last 3 and 5 year periods.

 

Scheme Name

YTD

6 Months

1 Year

3 Years

5 Years

Since Inception

DSP Black Rock Opportunities Fund

14.25

20.89

9.88

25.99

14.79

19.09

 NIFTY 500

9

15.63

3.15

18.75

10.61

13.51

Category Average

8.92

16.09

4.15

26.45

15.12

NA

Rank

7/163

15/163

18/159

63/146

67/138

NA

Figures are in % as on 31st July 2016; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

 

In terms of the calendar year returns the fund has beat the benchmark in 2011, 2013, 2014 and 2015 but has not beat its benchmark in 2012. It has generated higher returns than the equity diversified category in 2013, 2014 and 2015 but has underperformed in 2011 and 2012.

 

Scheme Name

2011

2012

2013

2014

2015

DSP Black Rock Opportunities Fund

-25.06

29.36

6.46

45.4

6.09

 NIFTY 500

-27.19

31.84

3.61

37.82

-0.72

Category Average

-23.92

34.25

5.43

54.21

3.76

Rank

86/134

101/140

65/144

87/147

 50/156

All figures in %

 

Risk: In terms of measures of risk such as standard deviation and beta (measured over the last 3 years), the fund has taken higher risk compared to category median.

 

 

Standard Deviation

Beta

DSP Black Rock Opportunities Fund

1.03

0.95

Category Median

0.98

0.89

 

 

 

 Risk-Adjusted Return: In terms of Treynor and Sharpe Ratio (measured over the last 3 years), the fund has proved higher risk-adjusted returns than the category median.

 

 

Treynor

Sharpe

DSP Black Rock Opportunities Fund

0.08

0.07

Category Median

0.07

0.06

 

 

Portfolio


Sector concentration: The fund’s concentration in the top 10 sectors is marginally higher than the category median but lower in the top 3 and 5 sectors.

 

 

Top 3

Top 5

Top 10

DSP Black Rock Opportunities Fund

33.4

48.92

70.28

Category Median

36.36

49.44

70.09

 

 

Company concentration: The Fund’s Concentration in the Top 3, Top 5 and Top 10 Companies is higher than the category median.

 

 

Top 3

Top 5

Top 10

DSP Black Rock Opportunities Fund

20.27

29.15

46.41

Category Median

18.77

27.25

43.96

 

 

 

 

Number of Equity Holdings: The Fund currently holds 48 stocks in its portfolio (30th June 2016), which is higher than the median stock count for the equity diversified category, which currently stands at 47. In the last 5 years the number of equity holding averages to 68.

 

Cash Equivalent:        

Its cash equivalent for June 2016 was 4.84 per cent. The average cash allocation for the last five years is 2.42 per cent. Its maximum allocation to cash over the last two years is 8.43 percent in April 2016 and lowest was 0.88 percent in November 2014. In 2015 it had an average cash allocation of 2.98 per cent.

 

Portfolio Characteristics:

The Top 5 Sectors include Bank-Private, Pharmaceuticals & Drugs, Refineries, IT-Software and Bank-Public.

 

In the last 6 months the fund has bought Adani Ports and Special Economic Zone Ltd, Castrol India Ltd, Housing Development Finance Corporation Ltd, Larsen & Tubro Ltd, Petronet LNG Ltd, Shriram Transport Finance Company Ltd, SRF Ltd, State Bank of India and JSW Steel Ltd.

 

Stocks of Bank Of Baroda, Coal India Ltd, Crompton Grieves Ltd, Gail (India) Ltd, Gujarat Pipav Port Ltd, Havells India Ltd, Hindalco Industries Ltd, Mangalore Sumi Systems Ltd, Motherson Sumi Systems Ltd. Reliance Industries Ltd and Tata Steel Ltd have been dropped from its portfolio.

 

Process

 

The scheme would invest 80%-100 % of its assets in Equity and Equity Related securities and 0 %-20% of its assets in Debt and Money market Securities.

 

The fund maintains a diversified portfolio with a mix across market cap. It typically maintained a large cap bias in the past. It uses a mix of “top-down” and “bottom-up” approach. The portfolio is Sector agnostic geared towards identifying best opportunities across industries. According to the fund house, large cap is defined as securities ranked by market capitalization between 1 and 100. The current portfolio has 72.6% allocation to large cap stocks.            

 

The fund’s exit load, like other equity funds, is 1% if it is redeemed or switched within 1 year from allotment. The minimum amount of investment in the fund is Rs 1,000 which is lower than most funds.

 

Fund Manager

 

Rohit Singhania has been a Research Analyst in the Equities Investment team at DSP BlackRock Investment Managers Pvt. Ltd. since June 2009, and also serves as its Fund Manager. As a research analyst, Rohit focused on sectors like Auto, Auto Ancillaries, Metals, Infrastructure, Sugar and Hotels.

 

Mr. Singhania has extensive experience in equity research. He has been managing the DSPBR Opportunities Fund since June 2015. He manages DSP BlackRock India T.I.G.E.R fund (The Infrastructure Growth and Economic Reforms Fund), the DSP BlackRock Opportunities Fund and the DSP BlackRock Tax Saver Fund. He is also the co-fund manager of the DSP BlackRock Natural Resources and New Energy Fund. Previously, he was a part of the Institutional Equities Research desk at HDFC Securities Limited, latterly as a Senior Equity Analyst for 13 months. Mr. Singhania has also served as an Equity Analyst at IL&FS Investmart Limited.

He holds a degree in MMS in Finance from the University of Mumbai and also a B.Com. degree.

 

 

Our View

 

DSP BlackRock Opportunities Fund has shown a good improvement in performance since 2015 after Mr. Rohit Singhania took over the fund management.  It runs a fairly diversified portfolio and has managed to pick up stocks and sectors which benefitted from the last rally. It can be considered for the multi cap allocation of your portfolio.

 

 
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