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 US Flexible Equity Fund.
About the DSP US Flexible Equity Fund
Investment objective
The primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in units of Global Funds US Flexible Equity Fund (BGF – USFEF).
The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus.
The Scheme may also invest a certain portion of its corpus in money market securities and/ or money market/liquid schemes of DSP Mutual Fund, in order to meet liquidity requirements from time to time.
It shall be noted ‘similar overseas mutual fund schemes’ shall have investment objectives, investment strategies, and risk profiles/considerations similar to those of BGF – USFEF.
The term “Flexible” in the name of the Scheme signifies that the Investment Manager of the Underlying Fund can invest either in growth or value investment characteristic securities placing an emphasis as the market outlook warrants.
Portfolio composition
The portfolio holds major exposure in Information Technology which accounts for roughly 21% of the portfolio. The top five sectors hold nearly 75% of the portfolio.
Source: DSP MF
Top 10 holdings of DSP US Flexible Equity Fund
| Name | Weightage % |
| Microsoft Corporation | 6.00% |
| Amazon.Com Inc | 4.80% |
| Alphabet Inc | 4.40% |
| Apple Inc | 4.00% |
| Corveta Inc | 3.10% |
| United Health Group Inc | 3.00% |
| Comcast Corporation | 2.60% |
| Berkshire Hathaway Inc | 2.60% |
| Visa Inc | 2.50% |
| Ross Stores Inc | 2.20% |
Source: DSP MF
Performance
Source: DSP MF
The fund has generated a CAGR (Compounded Annual Growth Rate) of 14% since its inception.
Fund manager
- Mr. Laukik Bagwe is the fund manager and brings over 22 years of total professional experience. He has been managing the scheme since August 2012. He has previously worked with Derivium Capital & Securities Private Limited, and Birla Sunlife Securities Ltd. He holds a B.Com, and PGDBA (Finance).
- Mr. Jay Kothari, Vice President & Product Strategist has been managing the fund since March 2013. He is the dedicated Fund Manager for overseas investments and has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm as a member of the Sales team (Banking) in May 2005. Prior to joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University, followed by an MBA in Finance from Mumbai University.
- Mr. Kedar Karnik has been managing the fund since July 2016. He joined DSP Investment Managers from Axis Asset Management and has over 17 years of investment experience. He has done his Masters in Management Studies from Jamnalal Bajaj Institute of Management Studies. He has over a decade of investment experience. He has previously worked with HSBC Asset Management and CRISIL Ltd.
Who should invest in DSP US Flexible Equity Fund?
- Experienced Investors with a well-set core portfolio, looking to diversify no more than 10% – 15% of portfolio internationally.
- Investors looking for international diversification, especially in US companies & wanting to hedge portfolios.
- Investors have the patience and mental resilience to remain invested for a decade or more.
- Investors not looking to chase the highest returns.
Why invest in this Fund?
- Offers the potential to grow your wealth by investing in the world’s largest & most developed equity market.
- Get access to well-known, large companies that are difficult to invest in directly for Indian investors, like Google, Amazon, Facebook, Comcast, Berkshire Hathaway, etc.
- Reduce portfolio volatility by investing in a foreign market that has a low correlation to the Indian stock market & may thrive even when Indian stocks fluctuate.
- Get the additional benefit of currency diversification.
Time horizon
- One should look at investing for a minimum of 10 years or even more.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The DSP US Flexible Equity Fund was launched in August 2012, and in its track record of ten years, the fund has delivered ~14% CAGR consistently.
Thus, it is best for investors who are willing to take international equity exposure in the portfolio and is looking to remain invested for a longer period.
Disclaimer
This is not recommendation advice. All information in this blog is for educational purposes only.
