Investors can buy the units of DSPBR Equity Fund, considering the fund’s track record in delivering strong returns and its ability to contain downsides quite well during periods of market volatility.

DSPBR Equity invests in stocks across market capitalisation segments — large, mid and small — taking advantage of any particular momentum in the market.

The fund has beaten its benchmark, the Nifty, consistently over a one-, three- and five- year period. Over a five-year period, the fund has delivered a compounded annual return of nearly 21 per cent that places it among the top few funds in the diversified category.

DSPBR Equity may be held as part of the core portfolio of investors, who look to outperform the benchmark during market upswings and protection from heavy downsides during bear markets.

Performance and strategy: The fund has been in existence for nearly 12 years. During the market upswings in 2003, 2005 and 2007, the fund outperformed its benchmark by a huge margin.

Considering DSPBR Equity’s flexi-cap approach, if one were to compare it against the CNX 500 as a benchmark, the former has demonstrated superior performance, a feat not easy to achieve.

During periods of market volatility, especially prolonged ones such as the one in 2004, or the whole of 2008, the fund has managed to protect the fall in its NAV better than its benchmark.

Its track record on short volatile periods is mixed; while it contained downsides in 2007, the same was not possible in 2006.

For investors looking at longer timeframes of at least 3-5 years, either the lump-sum or the systematic investment route may be options, depending on their surplus.

DSPBR Equity has a higher allocation to mid-cap stocks (less than Rs 5,000 crore market capitalisation) compared to funds such as Birla Sun Life Equity and HDFC Growth. The fund now has over 25 per cent of the portfolio invested in such stocks.

During the bull-run of 2003-07, the mid-cap allocation was over 35 per cent, which was one of the reasons for the fund’s good performance as mid-caps made bountiful gains during this period.

A large-cap intensive approach may be desirable in the present environment, as these stocks may be the first to recover when the current market volatility ends. The cash/debt component in the portfolio has been consistently little over 10 per cent , which suggests that the fund prefers to remain invested in equities albeit with large diversity rather than sit on cash and wait for opportunities.

Portfolio: The number of stocks in the portfolio has been trimmed over the last one year. From over 80 stocks over a year ago, the number of stocks in the portfolio in February 2009 is 67.

The diversification in terms of sectors invested is quite high, with as many as 26 of them in the portfolio. Further the fund appears to have adopted a defensive approach in recent times with consumer non-durables, pharmaceuticals and software being among the top few sectors held. – Hindu Business Line.

The fund is managed by Mr Apoorva Shah.

Investors can consider adding the HSBC Dynamic Fund to their portfolio. Though the fund is relatively new , it has done well to contain its downside in turbulent markets. Not only has it significantly outpaced its benchmark, the BSE 200 but it has also bettered its returns over some of the well-established large-cap funds such as Kotak 30 and Sundaram BNP Paribas Select Focus. While a good part of this outperformance can be credited to the fund’s high debt exposure, the fund’s mandate allows it to even switch completely to debt: investors should note that the high debt could limit returns when the markets look up again. On that note, the fund’s flexibility in switching to and from equity to debt also gives it a significant edge over balanced funds. This also spares investors from incurring entry and exit loads if they were to dynamically switch between equity and debt funds themselves.

Performance

In the last one year, HSBC Dynamic’s NAV has fallen by over 43 per cent, while that of its benchmark, the BSE 200, declined by over 53 per cent. The fund’s mandate that allows making tactical asset allocation calls appears to have come to its rescue. While that does make the fund reliant on the fund manager’s ability to get dynamic asset allocation calls right, it has acquitted itself well in this respect.

As early as June 2008, the fund had increased its debt exposure to 31.5 per cent. Such a high exposure to debt would have helped it pre-empt the impact of the equity fall that followed in October. Having the ability to make such dynamic asset allocation calls may also help the fund deliver returns better that that of balanced funds, which have a fixed asset allocation strategy (65-35 equity-debt). Its one-year returns lag that of balanced funds such as HDFC Prudence only marginally.

So, while the debt exposure will help the fund score over pure equity funds in the markets such as these, it may lag their returns if and when the markets turn around. In the brief four-month stint that fund had in the bull market, during September 2007-January 2008, the fund just about managed to keep pace with its benchmark.

Portfolio

In the equity portion of the fund’s portfolio, which makes up for 74 per cent of its total assets, it is the large cap stocks that find greater prominence, making up for about 54 per cent of the assets.

Mid and small-cap stocks contribute to over 10 per cent and 9 per cent, respectively. In terms of sector allocation, the fund has the highest presence in consumer non-durables, followed by that in banks and pharmaceuticals. With respect to its debt allocation, while the overall exposure to debt has moderated in recent months, it still is significant, at about 15 per cent.

Nothing much fascinating this year for the Indian Stock Markets. In the third week of the year market saw a night mare. Except that we saw many stocks reaching their lifetime high in Jan first and second week. Third week onwards investors started loosing their money as there we two consecutive lower circuits on 21 and 22 on Indian Markets.

Since the peek of some 21K markets fell at 7800 odd and now are at 9K levels. It lost its shine as it looses 60% in not even a year.

Dalal Street turned into Halal Street.

I doubt if any one booked their full profits.

This year we saw both the phases of the stock markets – Bull Market (for 15 days odd) and rest of the year bear phase.

Just don’t forget – “Every thing which has gone up has to come down again”

There are many more things, but these are the once which I think are of immense importance.

Sectors which Outperformed.

I can say none of them all are in red.

The worst hit sectors.

Reality / Infrastructure.

Metals.

Auto.

Airline.

Stocks which declared good dividend.

Disa India declared 2000% dividend on a face value of Rs. 10

Colgate Palmolive declared 900% on a face value of Re. 1

Best Performing Mutual Funds of the year – Download File

People staying in Mumbai if you want to invest in Mutual Funds pls do contact here.

Happy New Year 2009.

Happy Investing!

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Birla Sun Life Mutual Fund has added the facility of insurance in its Birla Sun Life Tax Relief 96 scheme. The facility would provide investors insurance upto Rs.10 lakhs till the age of 55 years against nine critical diseases. Birla Sun Life Tax Relief is an open ended equity linked scheme; the dividend option under the scheme was launched in 1996 while the growth option under the same scheme was launched in 2008. The objective of the scheme is to provide growth of capital along with Income Tax exemption benefits to investors. The scheme is managed by Mr. Ajay Garg and it is benchmarked against BSE 200. – MutualFundIndia

A Reuters poll says that mainly large caps stocks are a attraction of domestic Mutul Funds Companies.

Reeling under the liquidity pressure, the mutual fund industry could see more bailout deals — similar to the takeover of Lotus India Asset Management — in the coming days, say industry experts.
“One or two more such kind of transactions may be seen in days ahead but that will mainly be for bailing out some problem-ridden fund houses,” MF tracking firm Value Research CEO Dhirendra Kumar said.
Value Research chief Kumar said, “The outlook for the mutual funds industry remains grim for the next two years and fixed income plans would come under pressure. The days ahead will also see mutual funds reinventing themselves to be more focussed on retail investors.”
Mutual fund industry has been under pressure for last two quarters and both the Reserve Bank and the Finance Ministry are ceased of the liquidity problem faced by the industry.

In order to provide liquidity to the cash-starved industry RBI last month opened a special repo window for the banks aggregating Rs 20,000 crore for on-lending to the industry.

The lackluster response from banks to pick up funds from this window forced the RBI to extend the window the limit is exhausted.
Further reading Economic Times. Mergers and Accuasion