One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years.
DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries
Let us talk about the flagship product – DSP Strategic Bond Fund.
About DSP Strategic Bond Fund
The investment objective of the DSP Strategic Bond Fund
The primary investment objective of the Scheme is to seek to generate optimal returns with high liquidity through active management of the portfolio by investing in high-quality debt and money market securities.
The investment process of the DSP Strategic Bond Fund
DSP Strategic Bond Fund invests in high-quality government & corporate debt securities. It is a highly liquid portfolio with actively managed portfolio duration based on future interest rate movement predictions (lower duration in rising interest rates market and vice versa).
Portfolio composition of DSP Strategic Bond Fund
The portfolio major exposure of more than 30% in IND A1+ to maintain liquidity. The major instrument exposure is to Money market instruments at around 53%.
Source: dspim.com
Top 5 Holdings for DSP Strategic Bond Fund
| Name | Category | Weightage % |
| TREPS / Reverse Repo Investments / Corporate Debt Repo | TREPS | 15.22 |
| HDFC Bank Ltd. | Money Market | 9.88 |
| Bank of Baroda | Money Market | 9.88 |
| ICICI Bank Ltd. | Money Market | 9.72 |
| State Bank of India Ltd. | Money Market | 9.58 |
Source: dspim.com
Performance over 15 years
If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs. 27,389. This fund has outperformed the benchmark in all time horizons.
Source: Morningstar
The fund has given consistent returns and is in line with the benchmark over the period of more than 15 years generating a CAGR (Compounded Annual Growth Rate) of 7.39 %.
Fund managers
- Vikram Chopra – Total work experience of 14 years. He joined DSP Investment Managers from L&T Investment Management. He has also previously worked with Fidelity, IDBI Bank, and Axis Bank Ltd.
- Sandeep Yadav – Total work experience of almost 20 years. He joined DSP Investment Managers in September 2021 as Senior Vice President – Fixed Income Investments.
Who should Invest in DSP Strategic Bond Fund?
Investors who
- Understand and trust the fund manager’s ability to judge the direction of interest rates.
- Recognize investing in longer-duration debt securities could generate higher returns but comes with higher interest rate risk.
Why invest?
- Can help you navigate rising or falling interest rate scenarios.
- Earn potentially better returns than bank FDs.
Horizon
- One should look at investing and holding the investment for more than 3 years.
- Investment through SIP (Systematic Investment Plan) or Lumpsum should both be okay as the NAV of the fund does not fluctuate much.
Conclusion
DSP Strategic Bond Fund invests in high-quality government and corporate debt securities. It is one of DSP’s oldest debt funds with a 15+ years track record. Best suitable for people with either a short investment horizon.
This scheme has generated returns that have beaten inflation and have performed much better than Fixed Deposits
