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 consumer product – DSP Tax Saver Fund.
About the DSP Tax Saver Fund
Investment objective
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 to avail of a deduction from total income, as permitted under the Income Tax Act, 1961 from time to time.
Investment process
The fund follows the following investment strategy
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.
The fund is sector-agnostic and also market-cap agnostic.
Portfolio composition
The portfolio holds the major exposure in large-cap stocks at 70% and sectoral major exposure is Banks which account for roughly 32% of the portfolio. The top 4 sectors hold nearly 55% of the portfolio.
Source: DSP MF
Top 5 Holdings DSP Tax Saver Fund
| Name | Weightage % |
| HDFC Bank Ltd | 9.68 |
| ICICI Bank Ltd | 7.59 |
| Infosys Ltd | 6.31 |
| State Bank of India Ltd | 5.04 |
| Axis Bank Ltd | 4.63 |
Source: DSP MF
Performance
Source: DSP MF
The fund has generated a CAGR (Compounded Annual Growth Rate) of 14.25% since its inception.
Fund manager
- Mr. Rohit Singhania is the fund manager and brings over 20 years of experience. He joined DSP in September 2005, as Portfolio Analyst in the firm’s PMS division. He was transferred to the Equities Investment team in June 2009 as Research Analyst. Previously, he was with HDFC Securities Limited as a part of its Institutional Equities Research Desk. He spent 13 months at HDFC Securities as Sr. Equity Analyst. Prior to HDFC securities, he was employed with IL&FS Investment Limited as Equity Analyst.
- Mr. Charanjit Singh is fund-managed and brings over 17 years of total professional experience. He has been managing the scheme since January 2021. He has previously worked with B&K Securities India, Axis Capital Ltd, BNP Paribas India Securities, Thomas Weisel Partners, HSBC, IDC Corp., and Frost & Sullivan.
Who should invest in DSP Tax Saver Fund?
Investors looking to save tax by investing in equity-oriented funds with the lowest lock-in of three years. An individual can save up to Rs 46,800 by investing up to Rs 1.5 lakh in this fund.
Why invest in this Fund?
- Helps you aim to grow your wealth by investing in a mix of large & mid-sized companies, offering growth at reasonable prices.
- The lowest lock-in period of 3 years as compared to other tax saving options under Section 80C.
- Can help you beat the impact of rising prices over the long-term
Time horizon
- One should look at investing for a minimum of 3 years or more due to lock-in.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The DSP Tax Saver Fund is one of the oldest funds with a track record of more than 16 years and has delivered ~14% CAGR consistently.
Thus, it is best for investors who are willing to take some additional risk for good returns over a long-term spectrum and also at the same time look for saving tax.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
