DSPBR Top 100 Equity: Invest



Investors can buy units of DSPBR Top 100 Equity in light of its excellent record of delivering steady returns for the long term. During one-, three- and five-year timeframes, the fund has consistently performed better than its benchmark – BSE 100. During these periods, the level of outperformance has been to the tune of 5-7 percentage points.

DSPBR Top 100 Top has delivered a compounded annual return of 14.1 per cent during the past five years, placing it in the top quartile of the performance chart of large-cap focussed equity funds.

The performance is superior to peers such as Franklin India Bluechip and Birla Sunlife Frontline Equity. In the rally from March 2009, the fund was late to start off and hence was unable to participate in the initial leg of the upswing. In the rally of 2007-08, led by mid-caps, the fund marginally fell behind its benchmark, though it did better in the rally from mid-2006 to early 2007.

But what makes the fund a ‘must-have' in most mutual fund portfolios is its ability to contain downsides consistently, while also providing stable returns without taking too many risky bets. In the market fall of 2008-09 and in the subsequent correction during the last 6-8 months, the fund has contained slides much better than BSE 100, to the extent of 7-13 percentage points.

The fund can form part of the investors' core portfolio. The Systematic Investment Plan (SIP) route is ideal for long-term investors.

PORTFOLIO AND STRATEGY

DSP Top 100 does not take concentrated exposure to individual stocks or sectors. In terms of sector allocations too, less than 10 per cent has been the norm. This reduces the risk profile of the fund to a significant extent.

During the last couple of years, the fund has reduced exposure to sectors such as petroleum products, capital goods and power. Two sectors that did well — software and automobiles — have also seen reduced allocations.

Banks, finance, pharma and consumer non-durables, however, have seen higher exposures and figure among the top few sectors held. The exposure suggests a blend of value / defensive and momentum picks.

DSP BR Top 100 also churns stocks in a rather vigorous fashion. During the last one year, as many as 27 stocks exited the portfolio, while 17 were brought in.

HDFC, HDFC Bank, L&T and TCS have figured in the portfolio across market cycles and have seen higher allocations.

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