DSP NFO Business Cycle Fund Opens on Nov 27

By focusing on identifying strong industry cycles, the fund offers an unconstrained investment approach across market capitalizations, DSP said.

MUMBAI, Nov 26 (The CONNECT)-  DSP Mutual Fund has announced the launch of an open-ended equity fund following the business cycles-based investing theme.

The DSP Business Cycle Fund provides investors with the opportunity to invest across various market capitalizations, including large, mid and small cap companies. The investment strategy focuses on dynamically allocating assets to industries and sectors that exhibit strong growth potential, improving fundamentals, and attractive valuations.

DSP Business Cycle Fund is strategically designed to navigate through different phases of business cycles while managing risks effectively, said Charanjit Singh, Fund Manager, DSP Mutual Fund.

The Fund employs a framework-driven approach to select industries and companies with high growth or turnaround potential. It allows for active allocation to sectors during upcycles while also implementing cash calls and other risk management strategies.

By focusing on identifying strong industry cycles, the fund offers an unconstrained investment approach across market capitalizations, enabling investors to participate in growth opportunities regardless of company size.

The fund categorizes its investment universe into broader sectors and evaluates them at the industry level. It aims to identify industries that are at the bottom of their cycle with potential for significant growth, trading at low valuations compared to benchmarks. Additionally, the fund utilizes dedicated forensic analysts to exclude companies with poor corporate governance, even if they show strong growth prospects.

In terms of risk management, the fund incorporates various strategies including portfolio hedging through put options and arbitrage opportunities. Furthermore, it maintains the flexibility to invest up to 10% of its portfolio in Real Estate Investment Trusts (REITs) or Infrastructure Investment Trusts (InvITs) when equity market opportunities are limited.

The New Fund Offer (NFO) for the DSP Business Cycle Fund will open for subscription on November 27, 2024, and will close on December 11, 2024.