DSP Investment Managers Private Limited announced the launch of DSP Value Fund (the scheme), an open ended equity scheme following a value investment strategy that offers value conscious investors an exposure to quality companies at reasonable valuations. The Scheme also proposes to invest up to 35% of its portfolio in global equities and aligning with the investment framework of ‘Quality at Reasonable Valuation’. The NFO is scheduled to open on November 20, 2020 and will close on December 04, 2020.
“In the current low interest rate world, good companies rarely come cheap. Hence it becomes important to apply disciplined rules to identify such companies at reasonable prices. Our approach is focused on being less prone to bias and offering better risk management to our investors along with the opportunity and flexibility offered by international diversification. Investors in this Scheme should have a long term orientation to endure phases of underperformance that is a part of the value investing journey.” says Kalpen Parekh, President, DSP Investment Managers.
DSP Value Fund aims to generate better risk-adjusted returns with lower volatility across cycles. The Scheme will offer diversification from expensive growth companies and focus on investing in companies that are reasonably priced, based on fundamental characteristics.
The Scheme starts with Nifty500 as a universe and will allocate 65% in Indian equities and up to 35% in global equities. The international exposure is designed to provide an edge of diversification and a potential source of alpha generation to investors. The Scheme also proposes to invest up to 35% in Debt & Money Market Instruments and keep in cash or arbitrage whenever enough investment opportunities meeting the valuations criteria are not available.
The Scheme aims to follow a disciplined investment process that seeks to eliminate poor quality businesses. These are typically businesses that are highly leveraged, have high price volatility and poor accounting and valuation metrics, show misalignment between ownership and minority shareholders and have demonstrated sub-optimal growth. Valuations are reckoned considering fundamental factors such as price to book ratios, returns on equity and long term sectoral trends. The portfolio is selected from the remaining companies and assigned weights according to internal risk concentration guidelines.
