20240429 Calibre April 2024 Investor Presentation.pdf
DSP Flexi Cap Fund
1. [Title to come]
[Sub-Title to come]
Strictly for IntendedRecipients Only
Date
* DSP India Fund is the Company incorporated in Mauritius,under which ILSF is the corresponding share class
Sep 2021
| People | Processes | Performance |
DSP Flexi Cap Fund (erstwhile DSP Equity Fund)
#INVESTFORGOOD
2. 2
What is DSP Flexi Cap Fund?
FLEXI CAP
FUND
INVESTS ACROSS THE
MKT. CAP SPECTRUM
WITHOUT ANY LIMIT
~ 2/3rd
in large caps
~ 1/3rd
in mid& small
caps
INVESTMENT
PHILOSOPHY
Buy quality
businesses
Stay invested
Use corrections to
average down
FRAMEWORK TO
IDENTIFY COMPANIES
BusinessStrength
Management Quality
Growth prospects
CORE + TACTICAL
APPROACH
Core portfoliobasedon
long term themes
Core EquityPortfolio: ~
75%-80%
Tactical Equity Portfolio
: ~ 20%-25%
No. of stock: ~ 50-70
Flexi Cap fund aims at investing in quality businesses with good growth prospects
Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards. The strategy/investment approach
mention above currently followed by the Scheme and the same may change in future depending on market conditions and other factors.
3. 3
Why invest in the DSP Flexi Cap Fund?
CORE EQUITY
PORTFOLIO
ALLOCATION
Owns highquality
companieswith good
growth prospects.
Buys and holds forthe
long term
Seeksopportunities
across the market
No needfor investorto
decide on large/
mid/small cap allocation
Documentedinvestment
frameworkgivesclarity
on what to expect
Easy to fit intooverall
asset allocationplanof
the investor
LONG TERM EQUITY
INVESTMENTS
ONE STOP OPTION FOR EQUITY
INVESTMENTS
CLEAR ROLE IN OVERALL
ASSET ALLOCATION
Suitable for the core long term equity allocation in an investment portfolio
4. 4
Investment Philosophy
Business
Management
Growth
STOCK SELECTION
Frameworkfor identifying
qualitybusinesses
PORTFOLIO CONSTRUCTION
Core
portfolio
Tactical
portfolio
Core portfolioof qualitybusinesses
based on long term themes
REVIEW& REBALANCING
Stock
prices
Competitive
positioningof quality
businesses
Use marketcorrections to add to
qualitybusinessat lowerprices
Buy quality businesses, stay invested and use market corrections to average down costs
5. 5
Investment Framework (Business – Management – Growth)
Market share
dominance
Gaining marketshare
via rapidgrowth
Low capex
intensity
High cash conversion
Fundingvia internal accruals
Low cost structure
Not requiringequitydilution
1st of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Business
BUSINESS
Management
Growth
The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research
report/recommendation of the same and the portfolio may or may not have any
current or future position in these sector(s)/stock(s)/issuer(s).
Scaleadvantagescreate
a virtuouscycle
Vastmarket,small size,
hunger for growth &
calculated risk–taking
Healthy ROEs&
growth
Relentlessfocuson
costand cashflow
offsets challenges
Source: Internal.
6. 6
Investment Framework (Business – Management – Growth)
Long term orientationover
opportunisticshort term-ism
2nd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Management
Capital allocation
Focus on core business
MANAGE -
MENT
Growth
Business
Model
The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research report/recommendation of
the same and the Portfolio may or may not have any current or future position in these
sector(s)/stock(s)/issuer(s).
Capital allocation
directly influences
growth
Unrelated
diversificationcan
destroy value
Shorttermopportunism
can unravel in a
downturn
Source: Internal.
7. 7
Investment Framework (Business – Management – Growth)
Superiorgrowth rates
3rd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework– Growth
Competencyand
Perseverance
GROWTH
BusinessModel
Manage -
ment
The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research report/recommendation of the
same and the Portfolio may or may not have any current or future position in these
sector(s)/stock(s)/issuer(s).
Convertingpotential
opportunity into areal
business
Longterm compounding
withoutequity dilution
Marketcap growth largely
tracksearningsgrowth
Source: Internal.
8. 8
Investment Framework - Portfolio construction
DETERMINE
LONG TERM
STRUCTURAL
THEMES
Aspirational
country like India
dependenton
per capita
income growth
DIVERSIFY
STOCK
WEIGHTS IN
PORTFOLIO
No. of stocks=>
~ 50-70
Control portfolio
volatility
MAINTAIN
MARKET CAP
BALANCE IN
PORTFOLIO
Diversified
portfolio
~ 60-70% large
cap stocks
~ 30-40% Mid &
Small stocks
CORE
ALLOCATION
TO
STRUCTURAL
THEMES
~ 75 – 80% in
structural themes
~ 20-25% in
tactical ideas
withturnaround
triggers
Seeking to capture long term growth prospects while managing risks
EQUITYPORTFOLIO COMPOSITION
EQUITYPORTFOLIO DIVERSIFICATION
Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards.
9. 9
Investment team
Atul Bhole – Managing fund since June 2016
• Atul is also the co-Fund Manager for the DSP Equity & Bond
fund and theDSP Dynamic AssetAllocationFund.
• Atul has over 14 year of experience in fund management
and equity research with Fund management experience
since2011
• Joined DSP Mutual Fund in May 2016 as VP – Investments.
Previous work experience with Tata Asset Management
(Feb 07 – Apr 16),JP Morgan & SBI treasury
• Masters in Mgmt. Studies from JBIMS and has cleared his
CA exam
Experienced investment team with a wide coverage of Indian equity markets
FUNDMANAGER
Years in brackets ( ) is years of experience.
TEAM SUPPORTING THE FUND MANAGER
Charanjit Singh (12)
AVP, Capital Goods,
Infra, Power Utilities,
Consumer Durables
Abhishekh Ghosh– Managing the fund
sinceJan 2021
• Over 13 year experience in equity
research
• Joined DSPIM in Sep 2018 as midcap
analyst. Prior experience of working
with Motilal Oswal in their institutional
equities division
• Masters in Management Studies from N
L Dalmia Institute and has graduation in
Electronic Engineering.
Chinmay Sapre (9)
AVP, Aviation, Realty
Kaushal Maroo (11)
AVP, Autos, Ancillaries,
Cement
Dhaval Gada (10)
AVP, Banking and
FinancialServices
Abhishek Rathi (13)
AVP, Financials &
Industrials for Long /
Short
Aayush Ganeriwala (2)
Senior manager,Oil &
Gas, Metals
Suryanarayanan
Manian, CFA (10)
VP, Tech, Telecom,
Media, FMCG
Nilesh Aiya(12)
AVP, ForensicResearch
Resham Jain, CFA (14)
VP, Small & Mid Caps,Agri
inputs, Textiles, Chemicals,
Retail
Chirag Dagli (19)
VP, Healthcare
Abhishek Singh (14)
AVP, Portfolio Manager
Bhavin Gandhi (15)
AVP, Portfolio Manager
10. 10
Performance Scorecard
Source: MFIE; Rolling Returns are since inception till Sep 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option. Standard Deviation
of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes managed by same Fund Manager. Past
performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for performance of the index should not construe as
returns/performance of the Scheme. It is not possible to invest directly in an index.
DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods
ROLLINGRETURNS
POINT-TO-POINT RETURNS
TIME PERIOD DSP Flexi Cap Fund Nifty 500 TRI ALPHA
1 year 66.6 62.9 3.7
3 years 23.6 19.5 4.1
5 years 16.8 16.6 0.2
10 years 16.0 15.5 0.5
Since Inception 20.0 15.2 4.7
DSP Flexi Cap
Fund
Nifty 500 TRI
DSP Flexi Cap
Fund
Nifty 500 TRI
DSP Flexi Cap
Fund
Nifty 500 TRI
DSP Flexi Cap
Fund
Nifty 500 TRI
Average Annual Returns 24.9 19.6 19.5 15.5 19.9 15.9 20.0 15.6
Median Annual Returns 16.1 13.2 15.3 12.7 16.1 14.2 20.0 15.9
Minimum Annual Returns -54.0 -59.5 -26.9 -21.7 0.9 -1.5 7.2 5.0
Maximum Annual Returns 154.1 154.3 85.3 69.4 64.5 51.3 33.4 26.5
Returns / Risk 1.14 0.84 0.89 0.66 0.91 0.68 0.91 0.67
1 YEAR ROLLING RETURNS (%) 3 YEARS ROLLING RETURNS(%) 5 YEARS ROLLING RETURNS (%) 10 YEARS ROLLING RETURNS (%)
11. 11
Performance Scorecard
Source: MFIE; Rolling Returns are since inception till Sep 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option.
Standard Deviation of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes
managed by same Fund Manager. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for
performance of the index should not construe as returns/performance of the Scheme. It is not possible to invest directly in an index.
DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods
AVERAGE ROLLINGRETURNS
RETURN PER UNIT OF RISK
24.9
19.5 19.9 20.0
19.6
15.5 15.9 15.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1 yr RR 3 yr RR 5 yr RR 10 yr RR
DSP Flexi Cap Fund Nifty 500 TRI
1.14
0.89 0.91 0.91
0.84
0.66 0.68 0.67
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1 yr RR 3 yr RR 5 yr RR 10 yr RR
DSP Flexi Cap Fund Nifty 500 TRI
12. 12
Portfolio details – sector exposures
Significant exposure in Financials, Materials and Consumer discretionary sector during Atul’s tenure
Source: Morningstar; GICS Classification has been considered for sectoral break-up. Portfolio data as on Sep 30 2021. The sector(s)/stock(s)/issuer(s) mentioned in this note do not
constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer | More than 10% allocation highlighted in Orange
and more than 5% allocation highlighted in grey
Sectors Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Sep-21
Energy 10.1% 7.2% 6.8% 4.6% 1.0% 3.1% 3.1% 0.6% 0.4%
Materials 12.8% 13.0% 14.6% 15.6% 11.9% 11.3% 10.3% 11.5% 16.8% 15.8% 15.9% 15.4%
Industrials 10.0% 18.9% 17.6% 16.6% 15.9% 13.6% 10.4% 7.4% 6.2% 7.1% 8.4% 7.6%
Consumer Discretionary 14.3% 10.8% 11.3% 12.6% 15.0% 12.1% 9.4% 10.4% 10.0% 7.8% 12.2% 11.1%
Consumer Staples 4.9% 5.7% 7.4% 4.7% 7.3% 8.2% 10.2% 7.7% 6.8% 5.8% 6.0% 7.4%
Healthcare 7.6% 6.7% 2.1% 4.1% 6.4% 7.2% 6.9% 7.7% 6.4% 6.7% 6.4% 5.9%
Financials 25.3% 25.5% 31.8% 27.9% 32.0% 34.3% 40.4% 41.1% 34.0% 34.8% 36.4% 39.5%
Information Technology 8.5% 5.6% 3.6% 3.8% 7.4% 8.2% 8.7% 4.4% 4.8% 9.7% 7.4% 7.6%
Communication Services 1.2% 2.7% 6.1% 3.2% 1.1%
Utilities 2.9% 5.0% 3.7% 4.9% 1.2% 0.8% 1.0% 3.3% 3.9% 4.2% 3.7%
Real Estate 2.2% 2.1% 1.7% 0.9%
Total Equity 96.4% 98.3% 98.8% 96.1% 98.0% 95.7% 97.3% 98.2% 96.5% 99.5% 99.4% 98.7%
13. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
MARKET CAP BREAK UP
Large Cap Mid Cap Small Cap
13
Portfolio details – concentration and market cap trends
Significant increase in stock & sector concentration during Atul’s tenure
• Market cap tilttowards large cap.
• Increase in Mid/small cap exposure recently
59%
28%
12%
Source: MFIE; Portfolio data as on Sep 30, 2021. The sector(s)/stock(s)/issuer(s) mentioned in this note do not constitute any recommendation of the same and the Fund may or may not
have any future position in these sector(s)/stock(s)/issuer. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards.
40%
66%
81%
20%
30%
40%
50%
60%
70%
80%
90%
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
SECTOR CONCENTRATION TRENDS
Top Sector Top 3 Sector Top 5 Sector
26%
41%
58
30
35
40
45
50
55
60
65
70
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
STOCK CONCENTRATIONTRENDS
Top 5 stocks (LHS) Top 10 stocks (LHS) Total No of stocks
14. 14
Top Holdings as on Sep 30, 2021
Source: Internal. Past performance may or may not sustain in future and should not be used as a basis for comparisonwith other investments. The sector(s)/stock(s)/issuer(s) mentioned in this
presentation do not constitute any researchreport/recommendation ofthe same and may or may not have any future position in these sector(s)/stock(s)/issuer(s).
APPLYINGTHE INVESTMENTFRAMEWORK IN STOCK SELECTION& PORTFOLIO CONSTRUCTION
Investment framework is the key driver for buildingportfolio positions
Core PortfolioHolding, Tactical Portfolio Holding
TOP 5 STOCKS
PORTFOLIO
WEIGHT (%)
BUSINESS MANAGEMENT GROWTH COMMENTS
ICICI BANK
LIMITED
7.78
Right mix of retail & corporate
loan
Strong franchise in terms of
branch network & technology
Focused on profitable
growth with granularity
Advances growth expected to be
better than industry average
Possibility ofstrong earnings
growth for next 2 years
Core banking business
attractively valued with
probability ofrerating
HDFC BANK
LIMITED
6.71
Strong process driven
organization
Optimal mix ofprofitable retail
segment
Focused on consistent
profitable growth
Prudent in credit quality
and ALM management
Advances growth expected to be
better than industry average
Possibility ofstrong earnings
growth for next 2 years
Steady compounding of
earnings can provide
comfort
Franchise continues to
strengthen
ULTRATECH
CEMENT
LIMITTED
3.78
Largest cement player in India
with pan-India presence
Better mix with higher exposure
towards north, west & central
Continued capacity addition
Significant cash flow generation
Successfully built largest
Co in India through pulling
off strategic acquisitions
Timely & controlled use of
debt to expand
Strong cement demand with Infra
& real estate pick-up
Co growing faster than industry &
improving market share
Pricing power & cost savings can
provide much better profitability
growth & cash generation
Strong growth to provide
operating leverage & cost
saving driving profitability
Significant cash generation
& deleveraging can add to
the equity returns
AVENUE
SUPERMAR
T LIMITED
3.77
Solid value proposition for value
cautious Indian customerwith
EDLC-EDLP framework
Cluster-based approach to
expansion
Thoughtful online foray with D-
Mart Ready
Very thoughtful
assessment ofIndia
opportunity, customer
behavior
Conviction around
business model
Consistent execution
Faster store addition based on
land purchased during Covid
More working hours post covid
Coming back of high margin
general merchandise
Inflation helps retailers to report
higher growth
Higher proportion of pvt labels
Huge opportunity & multi-
year higher growth rate
Internal accruals to back
the growth
Optionality to build a
profitable online grocery
format
INFOSYS
LIMITED
3.62
Strong business model, shifting
from just labor arbitrage to
partner providing solutions
Ability to re-orient, re-train
towards new technologies
Management’s growth
strategies playing out
Continuity ofculture,
values despite
management changes
Investments in & flexibility to
front sales team started to yield
results with many large deal wins
Currently have industry leading
growth with strong profitability &
return parameters
Co has made a comeback
with leadership changes &
resultant sharper focus on
front end
Co is now back to industry
leading growth
15. 15
Current investment outlook and portfolio positioning
MARKET OUTLOOK
Market Valuations
Nifty is trading at ~22x FY23
which ison thehigher side
However, improving macro,
strong earning growth for few
years, low interest rates &
liquidity may keep supporting the
markets
Earnings growth expectations
Potentially strong earning growth outlook for next
2 years with low base, pent-up demand &
commodity inflation.
Earnings can doublein 4-5years fromFY20levels.
~ 20-25%
allocation to
TACTICAL
portfolio
KEYSECTORS
Financials
Materials
Healthcare
Consumer
Discretionary
~ 75-80%
allocation to
CORE portfolio
KEYRISKS
Global supply-chain issues
Global supply-chainsissuescontinuinglonger
than expected impactingcommodityprices&
recovery processadversely
Excessesincertainpockets likecrypto
Availability issues & excessivevolatile in
commodity prices
In theshortrun,companiesmayface
challengesto procurerawmaterial and may
notbe ableto passon therawmaterial
inflation impactingmargins
PORTFOLIO POSITIONING
Positioningthe portfolio to capture an economic recovery
Source: Internal. The sector(s)/stock(s)/issuer(s)mentionedin this presentation do not constitute any research report/recommendationof the same and may or may not have any future positionin these
Excesses in certain pockets
Strong retail inflows continuing
to take valuations to excessive
levels in certain mid & small cap
space
India’s macro getting stronger
Employment generation & wage growth over few
years with better exports, infra, real estate &
consumption pick up
Strong nominal GDP growth & buoyant tax
collections
Accommodativemonetary policy
Bond inclusioninglobal indices
16. Scheme Product Suitability
Riskometer
DSP FlexiCap Fund Benchmark- Nifty500TRI
DSP FlexiCap Fund
(Flexi Cap Fund - An open
ended dynamic equity
scheme investing across
large cap, mid cap,small cap
stocks)
This Open ended equity schemeis
suitableforinvestorswho are
seeking*
Long-termcapital growth
Investmentin equity and equity-
related securitiesto forma
diversified portfolio
16
Disclaimer & Product Labeling Details
In this material DSP Investment Managers Private Limited (the AMC) has used information that is publicly available, including information developed in-house. Information gathered
and used in this material is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. The
data/statistics are given to explain general market trends in the securities market, it should not be construed as any research report/research recommendation. We have included
statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations ofsuch
expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated
with our expectations with respect to, but not to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on
our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or
other rates or prices etc. The sector(s)/stock(s)/issuer(s) mentioned in this presentation do not constitute any research report/recommendation ofthe same and may or may not
have any future position in these sector(s)/stock(s)/issuer(s). The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the
scheme. Please refer to the SID for investment pattern, strategy and risk factors. Past performance may or may not sustain in future and should not be used as a basis for
comparison with other investments. All figures and other data given in this document are as on Sep 30, 2021 (unless otherwise specified) and the same may or may not be relevant in
future and the same should not be consideredas solicitation/recommendation/guarantee offuture investments by the AMC or its affiliates. Investors areadvised to consult their own
legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of DSP Mutual Fund. For scheme specific
risk factors and more details, please read the Scheme Information Document, Statement of Additional Information and Key Information Memorandum of respective Scheme
available on ISC of AMC and also available on www.dspim.com. For Index disclaimerclick here
The strategy mentioned has been currently followed by the Scheme and the same may change in future depending on market conditions and other factors. Large-caps are defined as top 100 stocks on
market capitalization, mid-caps as 101-250 , small-caps as 251 and above.
Mutual Fund investmentsare subject to market risks, read all scheme related documents carefully.
*Investors should consult their financial advisors if in doubt about whether the Scheme is suitable for them.