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Investors seeking to diversify their portfolios with a relatively less risky multi-cap fund can buy units of DSPBR Equity.
The bulk of its exposure is to proven large-cap names and it has reasonable exposure to mid-cap stocks as well.
The fund has outperformed its benchmark, the CNX 500, over one-, three- and five-year timeframes. Over the last five years, it has delivered compounded annual returns of 15.2 per cent, which is better than several peers in the category.
In the last couple of years, the fund has witnessed a steady improvement in its performance.
Over the long term, DSPBR Equity has consistently done well compared with peer funds such as Templeton India Growth, Reliance Growth and Sundaram Growth. The fund has given good returns in market rallies and also limited the downsides during market declines.
DSPBR Equity is suitable for investors with a reasonable risk appetite and a long investment horizon of about seven years. Over such long periods, the blend of large- and mid-caps tends to deliver category-beating returns.
Portfolio and Strategy The fund has been around for more than 17 years. It has delivered compounded annual returns of nearly 25 per cent over the past 10 years, which is among the best in its category.
DSPBR Equity invests predominantly in large-cap stocks while mid-cap exposure is to the tune of 28-30 per cent of its portfolio.
It seeks to reduce the risk profile significantly by taking low exposure to individual stocks, to the tune of only around 3.5 per cent of its portfolio.
While the focus on large-cap stocks protects the fund in volatile markets, the mid-cap portion ensures a fair degree of outperformance for it.
The fund’s key exposures have been to the software and banking sectors across timelines.
Over the last one year, DSPBR Equity also increased stakes in segments such as petroleum and automobile.
DSPBR Equity’s bets on SBI, Axis Bank and ICICI Bank have paid off. From the mid-cap space, Arvind and CMC delivered well.
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