DSP BlackRock Income Opportunities Fund is an open-ended scheme which commensurates the credit risk by helping generate interest income in a portfolio comprised of money market securities and fixed rate debt securities. Since its inception in May 2003, this has been one of the best performing mutual funds and was under the stewardship of some of the country’s best asset managers, Dhawal Dalal. This fund is suitable for investors who are seeking income over a medium-term investment horizon along with an investment in money market and debt securities.
Since its inception, Mr. Dalal saw this fund through several market cycles including some famous tumultuous ones which have helped cement its position as one of India’s best mutual funds. This fund has maintained a consistent exposure to long-dated securities with an expense ratio close to its category median. In July 2016, Pankaj Sharma and Laukik Bagwe took charge of the fund owing to the departure of Mr. Dalal. Although, they are a well-experienced team they still need time to test their capabilities as the fund has still not managed to display a positive impact following this leadership shuffle. However, this should not be a cause of concern as Mr. Bagwe has been managing this fund over the past few years and along with Mr. Sharma’s vast experience in risk management, the fund’s future prospects look good, to say the least.
This mutual fund scheme maintains an adequate liquidity cushion striking a great balance between liquid assets and high-yielding assets. Moreover, this fund has maintained a consistently sufficient liquidity cushion while being able to constantly add value all owing to a dedicated and integrated team approach. This fund is well diversified across sectors with a disciplined investment process thanks to a meticulous analytical and fundamental research approach. Furthermore, being a global leader in investment management, risk management, and advisory services, BlackRock’s investment team in India have had exposure to BlackRock’s strong brand prowess in fund management along with rich investment expertise. This even led to this fund being nominated in the Debt: Short-Term Bond category during the Morningstar 2014 awards.
Fundamental research forms the crux of the investment process. DSP BlackRock has a robust risk management strategy which focuses on the manager investing in pure corporate bonds with higher allocation towards AAA and AA rated bonds. This has also made the fund’s focus on lower-credit quality extremely vital to the fund’s success. Besides, the fund’s long-term record is also pretty good as it’s median is marginally lower than the Morningstar Category median which still makes it one of the best investment options. Comprising of a portfolio consisting of relatively high yielding bonds, this fund is a good position for a range bound yield scenario in the medium term. Moreover, this scheme has been experiencing a steady rise in the AUM over the years. Despite having a team capable of making robust decision making across credits and rates, lending a degree of comfort to the fund, the recent managerial shuffle has experts still on the fence. This is evident as it has only managed to achieve a Morningstar Analyst Rating of Neutral.
If you are looking for the top performing mutual funds and looking for a stable, accrual based fund capable of providing FD rates + 200 bps returns over the next 12-24 months, you can approach our financial advisors for customised investment plans.