SAY HELLO TO DSP VALUE FUND
DSP Value Fund is an equity fund built on the foundation of one of the oldest, most researched & most fundamental investment philosophies- Value Investing. It operates primarily on the idea: Figure out the value of something, and then pay a lot less for it.
Designed on value-investing principles, the fund will aim to:
- Invest in ‘good’ companies at ‘good’ prices: While in the current low interest rate world, good companies rarely come cheap, it is important to apply disciplined rules to identify such companies at reasonable prices (valuations).
- Diversify across the world and within India: Add good international companies to try to benefit from their innovation & expertise, which can also help reduce overall portfolio volatility (as against owning only Indian companies).
- Keep cash at the right time: When markets reach extreme highs, the fund’s ability to maintain cash respecting valuations will help reduce downside risk while also letting one reinvest when prices turn reasonable again.
Key performance highlights over the last 10 years: Value Strategy vs Benchmark
- Better Performance (CAGR): Value Strategy @ 9.6% vs 8.0% in NIFTY500 TRI#
- Lower Volatility (Standard Deviation): Value Strategy @ 15.0% vs 22.3% in NIFTY500 TRI#
- Better Returns/ Risk: Value Strategy @ 0.62 vs 0.35 for NIFTY500 TRI#
Performance of the Value Strategy
* Denotes period of the simulation from 30-Sep-2007 to 31-Oct-2020. Returns for domestic portfolio are net of 3% annual fees and impact costs.
** MSCI ACWI is used for the international slice to depict blended returns. The actual portfolio will not invest in MSCI ACWI, but in chosen securities based on fundamental research. Returns for international slice are net of 1% annual fees.
*Note: The performance numbers are Total return series from 30-Sep-2007 to 31-Oct-2020. Domestic Value Strategy is based on the investment process described in the presentation. The portfolios are rebalanced every March and September. Data Source: FactSet, MFIE.Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. These figures pertain to performance of the model and do not in any manner indicate the returns/performance of the Scheme. One cannot invest directly in an index.
** MSCI ACWI is used for the international slice to depict blended returns. The actual portfolio will not invest in MSCI ACWI, but in chosen securities based on fundamental research. Returns for international slice are net of 1% annual fees.
*Note: The performance numbers are Total return series from 30-Sep-2007 to 31-Oct-2020. Domestic Value Strategy is based on the investment process described in the presentation. The portfolios are rebalanced every March and September. Data Source: FactSet, MFIE.Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. These figures pertain to performance of the model and do not in any manner indicate the returns/performance of the Scheme. One cannot invest directly in an index.
For more detailed information on DSP Value Fund, download the Product Presentation.
WHAT YOU NEED TO KNOW BEFORE YOU INVEST
Value investing principles aren’t for everybody.
Even if all the principles driving DSP Value Fund resonate with you, here are some key things you need to keep in mind before you invest:
- This investing style demands temperament & patience. Being an equity fund, it will go through long phases of underperformance or performance deviations from benchmarks or other funds.
- If you really want to do well, think of your investment horizon in terms of decades, not years.
- In fact, let us also tell you that good companies which could be classified as value stocks today, for the last many years have been underperforming.
- So if you’re impulsive and select investment options based on short term returns, don’t consider this fund. It will not be easy to adopt this style of investing.
The positive is that just like in life, good rules eventually pay off. Investors who are able to stick to these principles across time horizons are likely to do well over time.
If investing over the long term while following these principles resonates with you, we welcome you to DSP Value Fund.
