DSP BlackRock Opportunities Fund is an open-ended mutual fund investment scheme whose objective is to generate long-term capital appreciation. Launched in the year 2000, DSP BlackRock Opportunities Fund is an aggressive multi-cap fund whose secondary objective is to generate income and facilitate the distribution of dividend from a portfolio comprising of equity and equity-related securities concentrating on the investment focus of the scheme. The minimum investment amount for investing in this fund scheme is Rs. 1,000. If an investor opts to choose the SIP investment route, then the minimum required investment is Rs. 500.
This mutual fund has been ranked number two in the ‘Diversified Equity’ category by CRISIL, for the quarter ended December 2017, a rank which has remained unchanged from the previous quarter. Helmed earlier by astute stock pickers Anup Maheshwari (December 2006–July 2012) and Apoorva Shah (August 2012–May 2015), this mutual fund investment is currently managed by Rohit Singhania. Mr. Singhania is known to favor a bottom-up approach while choosing stocks that are expected to demonstrate high earnings’ growth in a 2-2.5 year timeframe.
This fund is also renowned to follow a “go everywhere” strategy which is employed by Mr. Singhania and his team where there are no pre-defined market capitalization limits while picking stocks in the portfolio. The fund also boasts of an enviable dividend pay-out track record as in the last decade, it has managed to pay out dividends to its shareholders, every year barring the year 2009.
Since it’s inception, this mutual fund investment scheme has managed to carve out a niche for itself and has been widely recognized as a consistent performer. The fund has a large cap, growth-oriented focus and the management team ensures it keeps up with the pulse of the market. For instance, currently, with the market experiencing lifetime highs, Mr. Singhania and his team have put aside a higher allocation to large caps, with such stocks comprising nearly 65-70 per cent of the portfolio. Further, Singhania and his team take a long hard look at the valuation history – over a period of 10 years – while choosing stocks. Besides comparing the stock’s current valuation with respect to its historical valuation and also its peers’, Singhania and team also take into consideration an array of return ratios such as return on equity, return capital employed and cash flow before arriving at an investment decision. This strategy seemed to have paid off as this mutual fund investment scheme has consistently outperformed its benchmark Nifty 500.
In terms of volatility, the standard deviation of monthly returns of this mutual fund investment is lower than the average standard deviation of monthly returns of diversified equity funds. Further, the Sharpe ratio of the fund is vastly superior to the average Sharpe ratios of the entire category. The fund has in its team, one of best asset managers in the country as Mr. Singhania has repeatedly displayed a stellar performance in his short stint with this fund so far. This is further displayed as the fund has managed to perform better than its peers while also outperforming its benchmark index which has resulted in Morningstar upgrading the fund’s Morningstar Analyst Rating to Bronze from Neutral. The top 5 companies in the fund portfolio, HDFC Bank, CBLO / Reverse Repo Investments, ICICI Bank, Tata Steel Limited and State Bank of India account for only 23 per cent of the portfolio value which goes to show how well diversified this fund is in terms of company concentration.
If you are seeking a benchmark outperformer in the ‘Diversified Equity’ category which takes a concentrated stock approach while boasting of a good dividend pay-out as well, you can consider this fund for making an investment. With a large cap, growth-oriented focus attached to this fund, this fund is suitable for investors looking to achieve long-term goals. For more details regarding this fund, you can approach our financial advisors for customized investment plans.