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Fund’s exposure to midcaps increased since March 2018

The fund's investment objective is to generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity-related securities of midcap companies

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Launched in November 2006 as DSP Small and Midcap Fund, the scheme was renamed as DSP Midcap Fund in March 2018 and repositioned as a mid-cap fund post-Sebi reclassification of mutual funds. It featured in the top 30 percentile in the mid-cap category of CRISIL Mutual Fund Ranking (CMFR) for the two quarters ended June 2019. The fund's investment objective is to generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity-related securities of midcap companies.

The fund's month-end assets under management (AUM) more than doubled from Rs 2,312 crore in August 2016 to Rs 5,856 crore in July 2019. The fund outperformed its peers (funds ranked under the mid-cap category in CMFR June 2019) and the benchmark, Nifty Midcap 100 TRI, across all the trailing periods under analysis. An investment of Rs 10,000 in the fund on November 14, 2006 (since its inception), would have grown to Rs 50,618 (13.56% CAGR) on August 14, 2019, versus the benchmark's Rs 37,066 (10.82% CAGR) and the peers' Rs 37,770 (10.98% CAGR).

Portfolio analysis

During the past three years, the fund maintained a predominant allocation to mid-cap and small-cap stocks. Allocation to mid-cap stocks averaged 50.35% during this period, while small-cap and large cap allocations averaged 28.53% and 14.93%, respectively. Post Sebi's reclassification of mutual funds, the scheme increased exposure to mid-cap stocks since March 2018, in order to align the portfolio with the category definition.

The portfolio was diversified across 28 sectors during the past three years with major allocations to the banking sector (average exposure of 11.21%), followed by finance (9.80%), industrial products (8.56%), auto ancillaries (6.58%), and pharmaceuticals (6.57%).

The fund invested in 109 stocks during the past three years and held 22 stocks consistently. Sterlite Technologies, SRF Ltd, Ipca Laboratories and Atul Ltd were the major contributors to the fund's performance and were consistently held. Bajaj Finance was also among the highest contributors to the fund's performance during this period.

Vinit Sambre has been managing the fund since July 2012

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