Launched in April 1997, the fund is one of the premier mutual fund schemes from the fund house. The funds performance is noteworthy. With a compounded annual return of 24.31 per cent over the past five years, it ranks sixth among 61 diversified equity funds. It has beaten its benchmark S&P Nifty in terms of returns by a huge margin over all timeframes. Though the schemes performance took a beating in 2006, an optimum mix of stocks from across market capitalisations helped it stage a comeback and perform better than its peers in subsequent years. By now the fund has mastered the art of saving face in awful market conditions. In the current turmoil since January, the fund has done a good job of containing its losses.
Though the fund used to be overweight on large-cap scrips, in 2003 it started showing interest in mid- and small-cap segment stocks as well. The fund now holds no market capitalisation or sectoral bias. The fund manager hunts for stocks that have significant intrinsic value, and doesnt hesitate in taking considerable positions, including in small-cap companies. Currently 49.54 per cent of its net assets are invested in large-cap companies (market cap of more than Rs 4,542 crore), whereas the remaining is invested in small- and mid-cap stocks.
The fund manager believes in having a widely diversified portfolio. Stock picking is done following a bottom up investment style and from a value perspective. It has been diversifying its portfolio over a large number of stocks more than 80 on an average and sectors to lower risk and to tap the upsides in all market caps. Moreover, the funds exposure to individual stocks has been small. As for sectoral allocation, banks, oil and gas and pharmaceuticals enjoy the highest allocation.
The fund manager has stuck to a buy-and-hold strategy most of the times. However, at times of absolute uncertainty, as is prevailing now, the fund has witnessed a higher portfolio turnover ratio.
A highly diversified portfolio and the flexibility to move across market capitalisations make DSP BlackRock Equity Fund a truly diversified equity fund. The fund scores well on measures such as Sharpe ratio, which shows that it has given its investors good returns for the risk that it has taken. Its returns-since-inception figure is also decent. For all these reasons this is a fund that should be one of your top choices for constituting the core of your portfolio.