DSP BlackRock Focus 25: Focussed performance keeps it in the lead

Investors can consider systematic investment in DSP BlackRock Focus 25. The fund has outperformed its benchmark S&P BSE 200, over one- and three-year periods.

It delivered annualised return of 21.2 per cent against the benchmark’s 14.2 per cent over the last three years.

As the name suggests, the fund takes concentrated bets on stocks and hence investors with a moderate risk appetite can consider this fund.

The fund currently holds 27 stocks in its portfolio. This makes it slightly riskier than other diversified equity funds.

On a one-year rolling returns basis, it has outdone its benchmark 82 per cent of the times. The fund has delivered stellar returns in the last one year, as it stacked up in the top ten percentile in terms of returns.

In the last one year, it gave a return of 23 per cent — as against 18.4 per cent for that of S&P BSE 200. BPCL, Tata Motors and Maruti Suzuki were top contributors to its portfolio returns.

The fund is a large-cap fund with a mandate to invest at least 80 per cent of its portfolio in companies that are within the top 200 by way of market capitalisation.

Currently, it has 95 per cent of its portfolio in large-caps, while another 5 per cent is in mid-caps. The fund has been a consistent outperformer, beating its benchmark in four out of the last five years.

2013 has been a bad patch for the fund when it underperformed its benchmark by 7 percentage points.

In 2015, its relative performance did slip, but it has managed to pull up its socks since then.

State Bank of India, HDFC Bank,Maruti Suzuki, IndusInd Bank and Infosys were its top five stocks, as per latest available portfolio details.

During the past year, it took fresh exposure into stock counters of ITC, Hindalco and ICICI Bank. In contrast, it completely exited Max Financial Services, Tata Consultancy, and Ashok Leyland. In terms of sector, the fund currently has the highest exposure to financials, followed by automobiles and energy. While the fund has been overweight in the sectors of financials and auto vis-à-vis the benchmark index exposure, it is underweight on technology, FMCG and Healthcare.

Over the past one year, it increased exposure to both public and private sector banks in a major way. It also increased exposure in the sectors of pharmaceuticals and refineries, while reducing exposure to auto and electric equipment.

In the month of December it had 99.4 per cent of its portfolio into equities with the rest in other debt-related instruments. In the last three years, the fund usually kept cash holdings below 10 per cent. In October 2015, its cash exposure was at the highest at 5.1 per cent.

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