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DSPBR Small & Midcap: Strong performer
Thu, Mar 23, 2017
Source : Yash Jashnani, Citrus Interactive

DSP BlackRock Small & Midcap Fund is an open ended mid cap equity diversified fund. The primary investment objective is to generate long term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities which are not part of the top 100 stocks by market capitalization.

The fund is benchmarked against NIFTY Free Float Midcap 100. The Fund has an AUM of Rs 3,008.32 crore as on 28th February 2017 which has increased by Rs 1,408 crore as compared to last year February 2016.

 

Performance

The fund’s performance across various time horizons is extremely good as seen in the table given below. It has beaten its benchmark throughout the time horizon in all time periods except in the year-to-date (YTD) and 6-month period. It has done better than the equity diversified category in all the time periods.

Scheme Name

YTD

6 Months

1 Year

3 Years

5 Years

Since Inception

DSP BlackRock Small & Midcap Fund

11.71

7.95

49.65

32.24

22.58

16.14

 NIFTY Free Float Midcap 100

14.84

8.91

43.08

28.06

16.69

12.23

Category Average

10.28

5.08

34.97

22.73

17.43

NA

Rank

10/148

22/148

11/148

18/135

26/130

NA

Figures are in % as on 28th February 2017; 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 as shown in the table below. It has beaten the category average in all the periods except 2013.

Scheme Name

2012

2013

2014

2015

2016

DSP BlackRock Small & Midcap Fund

45

1.65

70.53

7.26

11.45

 NIFTY Free Float Midcap 100

39.16

-5.1

55.91

6.46

7.13

Category Average

34.28

5.33

54.61

3.88

4.75

Rank

18/129

106/132

29/134

33/141

10/148

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 BlackRock Small & Midcap Fund

1.11

0.95

Category Median

0.93

0.93

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

 

Treynor

Sharpe

DSP BlackRock Small & Midcap Fund

0.1

0.09

Category Median

0.06

0.06

 

Portfolio

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

 

Top 3

Top 5

Top 10

DSP BlackRock Small & Midcap Fund

21.79

32.29

49.08

Category Median

32.49

44.77

64.26

Company concentration: The Fund’s Concentration in the top 3, 5 and 10 companies is lower than the category median.

 

Top 3

Top 5

Top 10

DSP BlackRock Small & Midcap Fund

11.41

17.27

29.96

Category Median

16.68

25.31

42.37

Sector and Company Concentration signifies that the fund maintains a fairly diversifies portfolio.

Number of Equity Holdings: The Fund currently holds 64 stocks in its portfolio (28th February 2017), which is much higher than the median stock count for the equity diversified category, which currently stands at 46. In the last 5 years the number of equity holding averages to 55.

Cash Equivalent:        

Its cash equivalent for February 2017 is 10.10 per cent. The average cash allocation for the last five years is 3.21 per cent. Its maximum allocation to cash over the last two years is 10.10 per cent in February 2017 and lowest was 1.87 percent in January 2015.In 2017 it had an average cash allocation of 8.56.

 

Portfolio Characteristics:

The Top 5 sectors include Bank – Private, Textile, Pharmaceuticals & Drugs, and Engineering – Construction & Cable.

In the last 6 months the fund has bought Amara Raja Batteries Ltd., Ashok Leyland Ltd., Bajaj Finance Ltd., Dhanuka Agritech Ltd., Gujarat Narmada Valley Fertilizers & Chemicals Ltd., Hindustan Petroleum Corporation Ltd., Hindustan Zinc Ltd., Indo Count Industries  Ltd., Jagran Prakashan Ltd., JK Cement Ltd., Momai Apparels Ltd. & Sanghvi Movers Ltd.

Stocks of Blue Dart Express Ltd., Dr. Lal Pathlabs Ltd., Gujarat Gas Ltd., Max Ventures And Industries Ltd., NIIT Ltd., Prism Cement Ltd., Torrent Power Ltd.  and Tube Investments of India Ltd. have been dropped from its portfolio.

 

Process

The investment objective of the scheme is to generate long term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities which are not part of the top 100 stocks by market capitalization. From time to time, the Fund Manager will also seek participation in other equity and equity related securities to achieve optimal portfolio construction. This shall be the fundamental attribute of the Scheme. The Scheme may also invest a certain portion of its corpus in debt and money market securities, in order to meet liquidity requirements from time to time.

In  the equity portion, the fund would invest 65 – 100% of its assets in equity & equity related securities which are not a part of the top 100 stocks by market capitalization and 0 – 35% would be invested in equity related securities  which are amongst the top 100 stocks by market capitalization. The scheme would invest 0 – 25% in ADR’s, GDR’s & Foreign Securities.

The fund would invest 0 – 10% in debt and money market instruments.

The fund manager would select the 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 growth, improving margins, asset turns and cash flows.     

 

Fund Manager

Vinit Sambre

Mr. Vinit Sambre has been a Vice President at DSP BlackRock Fund Managers Pvt. Ltd. since January 2010 and also serves as its Fund Manager and Research Analyst. He has been managing DSP BlackRock Small and Midcap Fund since July 2015. He also manages DSP BlackRock Micro Cap Fund since March 2013.

He earned the Chartered Accountant designation from Institute of Chartered Accountant of India in November 1997. Mr. Sambre has earned the FCA qualification and also holds a B.Com. Degree.

 

Our View

The fund has shown very good consistency in performance. We believe the fund manager has very good stock picking skills in the mid, small and micro cap stocks segment. The portfolio has low churn and has a very well diversified portfolio. It can be considered for the small and midcap allocation in your portfolio.

 

 
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