Latest news with #DSPMutualFund
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Business Standard
12 hours ago
- Business
- Business Standard
DSP launches first Flexicap Quality-Only Index Fund, aims for 18% CAGR
DSP Mutual Fund on Thursday rolled out the DSP Nifty500 Flexicap Quality 30 Index Fund, India's first low-cost flexicap index fund combining a quality-only stock basket with dynamic market cap allocation driven by momentum signals. The fund tracks the Nifty500 Flexicap Quality 30 Index, which identifies 30 fundamentally strong companies—10 each from large, mid, and small caps—based on factors like high return on equity (ROE), low debt, and consistent earnings growth. Stocks within each segment get equal weight, ensuring no single company dominates. This fund will mirror India's first flexicap index, designed to help investors navigate shifting equity markets confidently. "The new fund addresses the most common challenges faced by equity investors: identifying high quality stocks, automating optimal allocation to large, mid and small caps and doing all this at a low cost," DSP MF said in a statement. How It Works Step 1 – Quality Filter: Only high-ROE, low-debt, earnings-growth stocks make it to the list. Step 2 – Flexicap Momentum Allocation: The index checks the SMID-to-large-cap ratio against its 200-day moving average every quarter. If small & midcaps (SMID) outperform, SMID allocation rises to 67%, large caps drop to 33%. If large caps lead, allocations reverse. Step 3 – Quarterly Rebalance: Fully rules-based, no human discretion. Performance Track Record Since October 2009, the index has delivered a CAGR of 18.1%, outperforming the Nifty 500 TRI's 13.0%. In volatile markets, quality focus has helped limit drawdowns. Over rolling 5-year SIP periods, median returns were 20.3% vs. 15.8% for Nifty 500 TRI. Why this matters for investors Most retail investors struggle with timing markets and switching between large-, mid-, and small-cap funds—often hurting returns due to costs and taxes. This fund's passive, rules-based structure removes the need for constant monitoring and avoids exit loads or tax outflows from switching strategies. This fund design is based on first principles, and investors benefit from investing in it as it removes the need to constantly monitor market segments or switch between schemes- something that most end up doing, incurring costs along the way. Its passive structure also means rebalancing occurs without tax outflow or exit loads, not typically available in DIY or actively managed flexi/multi-cap strategies. 'Two conditions are important for investors to achieve compounding - investing in high quality businesses at reasonable valuations. The quality factor is going through sharp price and time correction. We have always believed in launching funds when the strategy is in low cycle. Hence, we are introducing the first flexicap index fund which invests in 30 high quality companies across all market caps.' said Kalpen Parekh, Managing Director & CEO, DSP Mutual Fund. 'DSP Nifty500 Flexicap Quality 30 Index Fund brings together the best of both worlds, dynamic flexicap allocation and high-quality stock selection, using a transparent, rules-based approach. It's designed to reduce noise, eliminate complexity, and help investors participate meaningfully across market cycles,' said Anil Ghelani, CFA – Head – Passive Investments & Products at DSP Mutual Fund. For investors seeking all-weather equity exposure, this fund offers: High-quality stock selection Automatic market cap rebalancing Low costs & tax efficiency A proven performance track record
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Business Standard
a day ago
- Business
- Business Standard
DSP Mutual Fund unveils India's first passive flexicap quality index fund
DSP Mutual Fund (MF) on Thursday announced the launch of the industry's first passive flexicap fund. The scheme, centred around the quality theme, will mirror the Nifty500 Flexicap Quality 30 Index, which includes the top 10 stocks each from the Nifty100 Quality 30, Nifty Midcap150 Quality 50, and Nifty Smallcap250 Quality 50 indices. The fund house expects the quality theme, which has underperformed the 'value' theme in recent years, to witness mean reversion going forward. According to the fund house, the scheme — DSP Nifty500 Flexicap Quality 30 Index Fund — addresses key challenges faced by investors, such as identifying high-quality stocks and automating optimal allocation to large, mid, and small caps. Apart from stock selection and the quality theme, the fund house will leverage relative momentum in largecap and small- and midcap (SMID) segments of the market to generate alpha. The scheme will have a 67 per cent allocation in SMIDs and 33 per cent in largecaps when the relative momentum is in favour of SMIDs. In case of a shift in trend, largecaps will have a 67 per cent allocation.
Mint
21-07-2025
- Business
- Mint
Markets are euphoric, even minor earnings misses can trigger sharp volatility, says DSP MF's Kalpen Parekh
Earnings need to pick up and even a minor disappointment could trigger sharp volatility given that the valuations are still driven by past growth, according to Kalpen Parekh of DSP Mutual Fund. 'As we head into the upcoming earnings season, we believe the easy phase of earnings growth is behind us," said Parekh, managing director and chief executive officer at the company that manages over ₹2 lakh crore in assets. The next leg of earnings must come from top-line growth, according to Parekh. Current revenue growth is a modest 4%, and a meaningful pickup will require a recovery in demand as margin-led growth is fading, he said. Valuations reflect past strong earnings growth, but not the recent slowdown to single-digit gains, Parekh said. 'Markets are euphoric, where even minor earnings disappointments trigger sharp volatility," he said. Still, liquidity remains strong, every 5-10% dip attracts fresh money, SIPs stay steady, and many funds hold cash which is yet to flow in. Read more: Q1 moves: Retails investors bet big on property, cement and auto parts as 'smart money' retreats Meanwhile, promoters and experienced investors are selling in the rally, suggesting they see overvaluation, Parekh said, adding that a surge in initial public offerings (IPOs), rights issues, and qualified institutional placements (QIPs) indicates insiders are cashing out. Edited excerpts: Do you see the ongoing twists and turns in the India–US trade deal negotiations as a source of high market volatility in the near term? The ongoing negotiations and shifting narratives around the India–US trade deal are a vivid reminder that, whether it's tariffs, changing global alliances, or evolving policy frameworks, the landscape will remain volatile. And yes, these twists and turns can, and do, lead to bouts of market volatility in the near term. That said, volatility is not new for investors. And our role is to not chase headlines or every policy move or market swing; instead, it is to focus on resilient, well-managed businesses. We see businesses across sectors investing in innovation, expanding their reach, and building robust supply chains, qualities that help them withstand not just trade-related shocks but a wide range of uncertainties. While the noise of global negotiations may cause short-term jitters, the underlying health of Indian businesses and their ability to adapt give us confidence that well-run businesses will continue to create enduring value. What are your expectations for the upcoming earnings season? As we head into the upcoming earnings season, we believe the easy phase of earnings growth is behind us. In the post-covid period, a powerful combination of robust revenue growth and margin expansion fueled strong profit growth. Much of this margin expansion, however, was driven by aggressive cost rationalization and operational efficiencies levers that may have now run their course. With margins nearing peak levels, the scope for further expansion looks limited. This means the next leg of earnings will need to come from top-line growth. But here too, the picture is muted; revenue growth currently stands at a modest 4%, and a meaningful pickup will require a recovery in demand. The implication is clear: margin-led growth is fading. Demand-led growth must now take the lead. Unlike some global peers, Indian companies don't have infinite pricing power. Sustainable earnings will increasingly rely on volume recovery and demand strength. Do you see the results season as a potential market mover? Quite likely. We expect a mixed set of results, some resilience, some pressure. But the focus will shift from cost-cutting to quality, from margins to demand. And in that shift, quality businesses will stand out more than ever. The buzz is that earnings growth will pick up in the second half of FY26. Do you think that is already priced in the valuations? Valuations have already priced in a strong trend of earnings growth over the past few years. What's not priced in is a slowdown—yet earnings growth has dropped to single digits at the aggregate market level. If you exclude one-offs from a few telecom and cement companies, overall earnings growth is below 10%. Revenue growth has moderated, margins are peaking, and profit growth is slowing. Historically, Nifty companies have delivered 12–13% profit growth over the long term. We're currently a bit below that, yet valuations are at 23–24 times earnings. For 12% growth, fair valuations would typically be around 16–18 times. So, markets are a year or so ahead of what would be considered fair value. This isn't unusual, though. Markets sometimes trade ahead or behind fundamentals. Are the valuations euphoric? When markets turn euphoric and capital floods in, prices often run ahead of fundamentals. That's the phase we're in—where even minor earnings disappointments trigger sharp volatility. Still, liquidity keeps flowing. Every 5–10% dip attracts fresh money. Many funds hold significant cash or bond allocations, with asset allocation funds only 30% invested on average. SIPs continue bringing in ₹25,000 crores monthly, regardless of market conditions. Read more: Financial distributors turn to GIFT City for outbound funds. But few can enter. Meanwhile, promoters and experienced investors are selling into the rally, suggesting they see overvaluation. A surge in IPOs, rights issues, and QIPs indicates insiders are cashing out. At the same time, long-term investors are entering, creating a tug-of-war between profit-booking and accumulation. Despite weak earnings, markets remain stable, climbing higher even. How much do valuations matter across the market caps, especially in a market which is being called expensive? For a genuine long-term investor, the two fundamental principles are clear: focus on the quality of the company and the price you pay. These two factors—business quality and valuation—are what truly matter over the medium to long term. In the short term, markets can ignore both. In bull markets especially, valuations are often overlooked. But in my 30 years of investing, every time I've ignored valuations, initial returns came—but long-term gains were lower, as prices eventually revert to fair value. Markets don't stay expensive forever. Every company has a fair value, and paying above it usually leads to mediocre returns. Conversely, buying below intrinsic value typically delivers superior long-term returns. Is the market looking expensive now? Today, much of the market is expensive—some areas are priced months or even years ahead of fair value. But that doesn't mean you stop investing. If you're a long-term investor, staying invested is key. Just avoid low-quality or overpriced stocks. Returns that once came in a year may now take 18 months or more, so patience and adjusted expectations are important. The past five years delivered unusually high returns. Naturally, periods of lower returns will follow. We're not fully there yet, markets are still performing, with many segments delivering 15–20% returns due to recovery and a low base. Wearing a fund manager's hat, which segments do you see alpha coming from? Our fund managers see alpha coming from select segments where demand revival and structural growth remain strong. There are very few bargains available in the market. We like some of the sectors like private banks and healthcare and some selected opportunities in some other sectors. Large caps offer a better risk-reward profile than richly valued mid- and small-caps. Read more: Brokers push back as Sebi wages war on speculation Currently, the median (price-to-earnings) P/E ratio for mid- and small-cap stocks is 44x, which is very high from its long-term averages. The top 10 stocks seem relatively better placed in terms of return on equity (ROE) and valuations. Ultimately, alpha will be driven by quality businesses with durable moats and genuine growth drivers, rather than cyclical or overvalued segments. How effective are gold and silver as assets for portfolio diversification? Do you anticipate their allocation increasing and regaining attention among investors? Gold and silver should be part of your portfolio—not just because there's a war today, which could end tomorrow, but also due to exit and tax considerations. They're especially relevant for investors in emerging markets. Over the last 30 years, gold outperformed equities in 24 out of 25 emerging markets. India was the only exception, and even that margin has reversed. Gold typically shows low or even negative correlation to equity indices like the Nifty. While gold's long-term return is ~11% and Nifty's is ~13%, a 50-50 mix has delivered close to 13%—with 40% lower volatility due to opposing correlations. Gold isn't for cash flow but serves as a hedge—preserving returns and reducing volatility. Equities should form the larger part of your portfolio, as they generate cash flow. Still, during long periods when stocks deliver zero or negative returns, gold has historically performed well. A key long-term reason to own gold is currency debasement. Central banks have printed increasing amounts of debt in the last 10–15 years, weakening currencies. Since gold is finite and can't be created at will, it holds its value and acts as a safeguard. What about oil? Large money managers like us can't move money in and out very quickly. So what we often say is that, in some of our funds, we hold XLE—an index of global energy companies like Exxon, British Petroleum, or Chevron. If oil prices temporarily spike, these are the companies that tend to benefit through improved profitability, and we gain exposure by owning their shares through this global index. That's one way to participate in oil or hedge against sharp oil price movements. Alternatively, one can also own a couple of energy companies in India. That's generally the most practical way to get oil exposure. However, the challenge with investing in oil, or in companies involved in oil and other commodities, is that they typically don't generate strong return ratios over the long term. Their ROE often doesn't even exceed their cost of capital. Read more: Tesla Model Y arrives: ₹60 lakh, 500 km range. Charge ahead or run on empty in India? Additionally, oil price volatility is something these companies can't forecast—let alone investors like us. And if you can't forecast the price, it's difficult to value the business properly. So, we tend to invest in such companies only when they're in a very low cycle, when prices are depressed, and downside risk is limited. Then, any price rise can provide a useful hedge. We also discussed debt—are fixed income investments regaining popularity among investors? By the time investors start talking about an asset class, the best returns have usually already come. Currently, interest rates in India are around 7–8%, so bond returns are in that range. But over the last two years, well-managed bond funds have delivered 10–12%. The ideal time to invest was when no one was interested—two years ago. With rates trending down and the RBI cutting, bonds remain important—especially if you're cautious about equities or want to reduce portfolio volatility. As a conservative investor, I typically maintain a 65–35 split. When valuations are high, I shift 20–25% into bonds and 10–15% into gold. Interest rates have been stable and may continue to trend lower, though they're hard to forecast beyond 3–6 months. That said, India's fiscal position, currency, and inflation are all in reasonably good shape.
Time of India
18-07-2025
- Business
- Time of India
DSP Mutual Fund announces launch of Endurance SIF
DSP Mutual Fund today launched Endurance SIF , a new investment platform designed for experienced investors, bridging the gap between traditional mutual funds and personalized portfolio management . 'Endurance SIF is a distinct new business vertical from DSP Asset Managers Pvt. Ltd., built to offer Specialized Investment Funds (SIFs) to investors,' according to the fund house's website. Explore courses from Top Institutes in Select a Course Category Management Project Management MBA Healthcare CXO Operations Management Degree others Data Science MCA Design Thinking Others Digital Marketing Data Analytics Leadership Data Science healthcare Artificial Intelligence PGDM Public Policy Product Management Technology Finance Cybersecurity Skills you'll gain: Duration: 9 Months IIM Calcutta CERT-IIMC APSPM India Starts on undefined Get Details Skills you'll gain: Duration: 10 Months IIM Kozhikode CERT-IIMK GMPBE India Starts on undefined Get Details Skills you'll gain: Duration: 11 Months IIM Kozhikode CERT-IIMK General Management Programme India Starts on undefined Get Details Also Read | NFO Insight: Capitalmind Mutual Fund's flexi cap fund opens for subscription. Will it help to manage current market volatility? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas Prices In Dubai Might Be More Affordable Than You Think Villas In Dubai | Search Ads Get Quote Undo According to a press release by the fund house, it offers the flexibility of bespoke portfolio strategies within a robust regulatory framework—ensuring that innovation doesn't come at the cost of discipline or investor protection. 'Endurance—as the name suggests—aims to apply the first principles of investing and risk management to offer an absolute returns approach and help investors stay invested for the long term to reap the benefits of compounding. Here, we will draw upon our 28 years of mutual fund expertise and the last 12 years of hedge fund experience that some of our global investors have benefited from,' said Kalpen Parekh, Managing Director and CEO, DSP Mutual Fund. Live Events 'At DSP, we believe investing must be approached with the right design, sound principles, and a long-term view. Our SIF products will be a natural extension of this philosophy, offering evolved solutions for more experienced investors,' the fund house added. Also Read | AIFs and wealth managers flock to mutual fund licences amid SEBI's SIF push Several fund houses, including Edelweiss Mutual Fund, Mirae Asset, and ITI Mutual Fund, had earlier introduced SIF offerings.
Hans India
08-07-2025
- Business
- Hans India
Global gold demand surges: India holds 15 pc of $23trillion global gold market now
The global gold market, now valued at approximately $23 trillion, is witnessing a surge in demand as central banks ramp up their purchases in a move to reduce dependence on the US dollar, according to the July 2025 edition of the DSP Mutual Fund's Netra report. In comparison, global foreign exchange reserves stand at around $12.5 trillion. The report notes that even a modest 5 per cent shift of these reserves into gold could trigger a significant and sustained rally in gold prices. India continues to hold a dominant position in the global gold landscape, accounting for 15 per cent of the total gold held worldwide. Of all the gold mined to date, 65 per cent is in the form of jewellery, indicating both the cultural and financial importance of the metal, particularly in countries like India. Central banks have emerged as the primary drivers of the recent gold demand boom. Between 2000 and 2016, total central bank gold purchases amounted to $85 billion. In stark contrast, in 2024 alone, central banks acquired gold worth $84 billion. Since 2022, central banks have been consistently purchasing nearly 1,000 tonnes of gold annually, which represents over a quarter of the annual global mining supply. This shift highlights the growing preference for non-dollar reserve assets amid concerns about the volatility of US Treasury Bonds, which have historically been viewed as safe-haven investments. The Reserve Bank currently holds 880 metric tonnes of gold, according to the latest figures. However, it has refrained from adding to its reserves in FY26, likely anticipating a correction in gold prices, which have risen by over 80 per cent in the past five years. The rally in gold prices has been driven largely by geopolitical uncertainty, trade tensions, and a lack of attractive alternatives to the US dollar as a global reserve currency. The report points out that potential alternatives to the dollar are riddled with limitations. The Euro continues to show structural weaknesses due to fiscal imbalances within the Economic and Monetary Union. The Chinese yuan, though increasingly influential, remains heavily state-controlled and lacks the transparency and global trust required to function as a major reserve currency. Other currencies are simply too small to attract meaningful interest from central banks. Additionally, the report highlights a positive domestic trend in India, noting that strong operating cash flows have resulted in elevated operating cash flow margins. This signals improved capital allocation discipline and corporate governance, strengthening India's economic fundamentals at a time when global financial systems remain under pressure.
