DSP's old fund offering: Should you invest?
Investors should not invest in this fund if their investment horizon is less than five years, as they can witness negative or less than FD returns
While more and more fund houses are launching new fund offers and offering Flexi funds, there are also fund houses informing investors of the old fund offerings (OFO). So, what is OFO? A mutual fund house launches OFOs to aware investors of a ready and proven mutual fund scheme that has been through various market cycles over many years. DSP Investment Managers recently announced a unique OFO of the DSP Flexi Cap Fund. These OFOs indicate DSP Flexi Cap Fund’s ability and flexibility to allocate across market capitalisations with a strong investment framework.
Performance
The fund was launched in April 1999 and is benchmarked against Nifty 500 TRI.
This fund is considered to be an all season fund, as it invests to focus on business longevity, prudent management, and growth sustainability, also known as the BMG framework.
The BMG framework follows businesses that are less capital intensive, have a high cash conversion, market share dominance, prudent capital allocation, and superior margins, among other factors.
This approach has helped the fund to deliver a compounded annual growth rate (CAGR) return of 19.3% over 24 years. The fund has delivered an annualised return of 60.31%, 16.64%, and 15.95% over one, three, and five years as of July 27, 2021, shows Ace mutual fund data.
“Many times, we ignore the old, even though it’s good. We are re-introducing investors to a proven Flexi cap fund with a track record of almost two and a half decades through our OFO. A fund that focuses on simple rules of good investing – invest with good managements in good sectors and stick with them till they execute,” said Kalpen Parekh, MD & CEO, DSP Investment Managers.
Flexi Cap Fund Returns Comparison
Points to note
— Investors should not invest in this fund if their investment horizon is less than five years, as they can witness negative or less than fixed deposit returns.
— The expense ratio of the DSP Flexi cap fund is 1.95%. The fund attracts an exit load of 1% if redeemed within 12 months of allotment.
— The product is not suitable for the investor with a low-risk appetite as it falls under the ‘Very High’ risk-o-meter category. Investors should consult their financial advisors before investing in this product.
— Minimum investment and additional purchases are Rs 500 and any amount after that. The net asset value remains the same for the new investors.