DWS Alpha Equity Fund - Growth

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: DWS Alpha Equity Fund was the first equity offering from DWS Investments. It is an open-ended equity diversified fund. Its investment objective is to generate long-term capital growth from a diversified portfolio of equity and equity-related securities. The fund is a typical diversified scheme that will invest in companies across a range of market capitalisations with a preference for medium and large companies. The fund uses both the top down and bottom up approach to investing. The scheme is benchmarked against the S&P CNX Nifty. Currently the scheme has a corpus of Rs 150.65 crore. Despite the fund’s good performance, it has struggled to garner more assets.

The fund has soundly beaten both its category average and its benchmark over the one-, two-, three- and five-year horizon. Over the five years that it has been in existence, the fund has given a compounded annual return of 38.63 per cent, outperforming its benchmark by a huge margin.
The fund showed a big leap in performance from 2005 to 2006 due to the fund manager making the right call on the non-ferrous sector. The fund manager concentrates on quality stocks rather than quantity, concentrating more on defensive stocks. However, the year-to-date performance has been slightly dull compared with that of its benchmark. Since the meltdown in equity markets at the beginning of this year, the fund has lost (-)27.19 per cent, whereas the S&P Nifty has lost (-)26.70 per cent.

The fund manager, Aniket Inamdar, knows well the art of entering and exiting a sector at the right time in the market cycle. The fund exited the auto and auto ancillaries sector well in time, sensing the impending slump in the auto market. Thereafter, it increased its exposure to the steel sector due to robust domestic demand and global consolidation (the sector currently accounts for 7.45 per cent of the portfolio). Lately, the fund has reduced its exposure to interest-rate sensitive sectors like banking, and increased exposure to telecom and FMCG. The top three sectors constitute 34.84 per cent of the portfolio while the top 10 holdings constitute nearly half the total portfolio.