One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP Mutual Funds is backed by the DSP Group, an almost 160-year-old Indian financial giant. In this blog let us explore their – DSP Short Term Fund.
About the DSP Short Term Fund
Investment Objective: The primary investment objective of the Scheme is to generate returns commensurate with risk from a portfolio constituted of money market securities and/or debt securities.
Note: There is no assurance that the investment objective of the Scheme will be realized.
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What is in the DSP Short Term Fund?
- This fund invests in high quality debt securities, primarily AAA rated corporate bonds and sovereign (government) bonds and can invest up to 20% in AA+ rated instruments.
- It is one of DSP’s oldest debt funds with a 19 year+ track record.
Portfolio Composition
Top 5 Holdings
| Name | Instrument | Weightage % |
| GOI Sec 7.18 14/08/2023 | GOI Securities | 9.68 |
| Power Finance Corporation Ltd SR BS221B Debenture 7.59 17/01/2028 | Debenture | 4.61 |
| GOI Sec 7.32 13/11/2030 | GOI Securities | 4.35 |
| GOI Sec 7.17 17/04/2030 | GOI Securities | 3.46 |
| Titan Company Ltd SR 2 NCD 7.75 03/11/2025 | Non-Convertible Debenture | 3.44 |
Source: Value Research
Performance
| Particular | DSP Short Term Fund | CRISIL Short Duration Debt A-II Index ^ | CRISIL 10 year Gilt Index |
| CAGR (%) | CAGR (%) | CAGR (%) | |
| 1 year | 7.65 | 7.5 | 8.55 |
| 3 years | 5.44 | 5.42 | 4.3 |
| 5 years | 6.73 | 6.59 | 6.15 |
| Since Inception | 7.79 | 7.61 | 6.4 |
Source: DSP MF
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Fund Managers
The Fund is managed by
- Mr. Laukik Bagwe – he has been managing this fund since July 2016 and he has a total work experience of 23 years.
- Mr. Sandeep Yadav – he has been managing this fund since March 2022 and has a total work experience of 21 years.
Who Should consider the DSP Short Term Fund?
Investors can consider this fund if they
- Value stability and consistency of returns.
- Do not want to take a high level of credit or interest rate risk.
- Are looking to reduce the overall risk level of their portfolio.
- Want to invest for short term.
Why should one invest in DSP Short Term Fund?
- This fund can be a credible alternative to a 3 year bank FD.
- As this fund is actively managed by fund managers, it can aid in generating alpha.
Time Horizon
- One should look at investing for a period between one to three years.
- Investment through a Systematic Investment Plan (SIP) may help in tackling the volatility of the broad markets.
Conclusion
The DSP Short Term Fund has a proven track record of more than 19+ years, where it has delivered a CAGR (Compounded Annual Growth Rate) of 7.61% as of 28th March 2024. As the fund invests in money market and debt securities it carries low to moderate risk. One can consider it for a short-term period as an alternative of FD.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
