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If you fear the market may turn turbulent after the splendid rally in the last 18 months, here’s one fund to shield your portfolio against any sharp slide.
Investors with a moderate risk appetite and five-year horizon can consider systematic investment (SIP) in DSP BlackRock Equity Fund. While not a chartbuster, it can deliver above-average returns over the long term.
Though the scheme has the flexibility to invest across the market by virtue of being a multi-cap fund, the allocation tends to have a higher large-cap tilt. Currently, more than two-thirds of the scheme’s assets are invested in large-cap stocks. This has helped DSP BlackRock Equity contain downsides during corrective phases compared with its benchmark CNX 500 Index. At the same time, the fund has delivered returns higher than its benchmark during most rally phases in the past.
TurnaroundAfter a sedate performance in 2013, the scheme made a comeback beginning early 2014. It has clocked higher gains than its benchmark across one, three and five-year time frames. The fund tops the returns chart on a one-year basis, gaining 15 percentage points more than its benchmark. Adept sector rotation by increasing allocation to themes such as automobiles, NBFCs and cement and trimming exposure to underperforming sectors such as construction projects and consumer goods boosted performance.
Adding stocks such as National Building Construction Company, Atul Ltd, Sterlite Technologies and HPCL lifted the fund’s NAV over the past year. Other stocks that aided performance were NCC, Ashok Leyland, Sadbhav Engineering and SRF. Likewise, exiting stocks such as Jaiprakash Power Ventures and Biocon helped the fund better its benchmark. This has enabled it to forge ahead of peers such as Principal Growth in the last one year.
In the last five years, the fund delivered returns higher than its benchmark 87 per cent of the time. SIPs in the fund over the last five years would have yielded annual gains of over 20 per cent.
In the last six months, the fund has increased exposure to sectors such as banks, automobile, cement and construction. The scheme appears to be betting big on financials, which currently account for over a third of its total assets.
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