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DSPBR Tax Saver: Ace ELSS Fund
Sun, Oct 09, 2016
Source : Yash Jashnani, Citrus Interactive

DSP Black Rock Tax Saver Fund is an open ended Equity Linked Savings Scheme (ELSS). The primary investment objective of the scheme is to seek to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity related securities of corporates, and to enable investors avail of a deduction from total income, as permitted under the Income Tax Act, 1961 from time to time. The fund has an AUM of Rs 1,416 crore as on 31st August 2016 which has increased by Rs 318 crore compared to last year as on 31st August 2015.

 

Performance

The fund’s performance across various time horizons is outstanding as seen in the table given below. It has beaten its benchmark in all the time periods. It has also beaten the ELSS category in all the time periods.

 

Scheme Name

YTD

6 Months

1 Year

3 Years

5 Years

Since Inception

DSP Blackrock Tax Saver Fund

18.56

37.03

19.71

31.12

20.27

14.89

 NIFTY 500

11.39

28.49

12.31

21.46

13.13

8.47

Category Average

11.78

29.88

12.81

27.48

16.91

NA

Rank

2/40

2/41

2/38

6/34

3/33

NA

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

 

In terms of the calendar year returns the fund has beaten its benchmark in all time periods. It has generated higher returns than the ELSS category in 2012, 2013, 2014 and 2015 but has underperformed in 2011 compared to its category average as shown in the table below.

 

Scheme Name

2011

2012

2013

2014

2015

DSP Blackrock Tax Saver Fund

-26.68

39.81

6.69

52.21

4.4

 NIFTY 500

-27.19

31.84

3.61

37.82

-0.72

Category Average

-23.77

31.94

6.4

50.97

3.54

Rank

25/33

3/34

19/34

16/35

13/36

All figures in %

 

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

 

Standard Deviation

Beta

DSP Blackrock Tax Saver Fund

0.95

0.89

Category Median

0.92

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 Blackrock Tax Saver Fund

0.12

0.11

Category Median

0.11

0.1

 

 

Portfolio

Sector concentration: The fund’s concentration in the Top 3, Top 5 and Top 10 sectors is higher than the category median.

 

Top 3

Top 5

Top 10

DSP Blackrock Tax Saver Fund

35.53

48.34

65.85

Category Median

33.48

44.97

64.98

 

 

Company concentration: The Fund’s Concentration in the Top 3 Companies is higher than the category median and the fund’s concentration in the Top 5 Companies is same as compared to the category median and the fund’s concentration in Top 10 Companies is lower compared to its category median.

 

Top 3

Top 5

Top 10

DSP Blackrock Tax Saver Fund

16.96

24.01

39.35

Category Median

16.24

24.01

39.39

 

 

Number of Equity Holdings: The Fund currently holds 63 stocks in its portfolio (31st August 2016), which is higher than the median stock count of the ELSS category, which currently stands at 49. In the last 5 years the equity holding averages to 76.

 

Cash Equivalent:        

Its cash equivalent for August was 1.70 per cent. The average cash allocation for the last five years is 2.14 per cent. Its maximum allocation to cash over the last two years is 4.51 percent in October 2015 and lowest was 0.70 percent in April 2014. In 2016 it had an average cash allocation of 2.76 per cent.

 

Portfolio Characteristics:

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

 

Currently the fund has 77% exposure to cyclical stocks, 14% to defensive stocks and 6% to service stocks.

 

In the last 6 months the fund has bought Asian Paints Ltd., Castrol India Ltd., Grasim Industries Ltd., KNR Construction, HCL Technologies Ltd., Hero MotoCorp Ltd., ITC Ltd., Jagran Prakashan Ltd., Jyothy Laboratories Ltd., LIC Housing Finance Ltd., Power Grid Corporation of India Ltd., Punjab National Bank., Shriram Transport Finance Company Ltd., Union Bank Of India., Vardhman Textiles Ltd., V-Guard Industries Ltd., and Yes Bank Ltd.

 

Stocks of Arvind Ltd., Vedanta Ltd., Axis Bank, Ashok Leyland Ltd., Bank Of Baroda, Cadila Healthcare Ltd., Tata Steel, Max Financial Services, Coal India Ltd., Cummins India Ltd., GAIL (India) Ltd., Gujarat Pipavav Port Ltd., Hindalco Industries Ltd., Mahindra& Mahindra Ltd., Motherson Sumi Systems Ltd., United Spirits Ltd., Max Ventures & Industries and Workhadt Ltd. were sold in the last 6 months.

 

Process

The scheme would invest 80-100% in Equity & Equity Related Securities of which 0-20% would be invested in ADRs, GDRs and foreign equity securities. The scheme would also invest 0-20% in Debt, Securitized Debt and Money Market Securities.

The Investment Manager will select equity securities on a bottom-up, stock-by-stock basis, with consideration given to low price-to-earnings, price to -book, and price-to-sales ratios, as well as improving margins, asset turns, and cash flows, amongst others.

 

 

Fund Manager

Mr. 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. Mr. Singhania focuses on the auto, auto ancillaries, metals, infrastructure, sugar, and hotels sectors at the firm. He joined the firm in September 2005 as Portfolio Analyst in its Portfolio Management Services division.

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

He has been managing this fund since July 2015. He also manages DSPBR Opportunities Fund, DSPBR India T.I.G.E.R. Fund and DSPBR Natural Resources & Energy Fund.

 

Our View

The fund has a very impressive track record. It has shown outperformance within the category as well as against the benchmark. We also like that it maintains a low allocation to cash and maintains a diversified portfolio. It is advisable to consider this for your tax saving investment if you are ready for a 3-year lock in which comes with this category of mutual funds.

 


 

 

 

 
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