The Business Bytes
Mumbai, November 27, 2024(TBB Bureau): DSP Mutual Fund has introduced the DSP Business Cycle Fund, an open-ended equity scheme centered on a business cycles-based investing theme. Designed to help investors optimize their entry and exit from market themes, the fund offers the flexibility to actively allocate significant weights to industries in an upcycle while managing risks effectively.
The fund’s innovative strategy focuses on dynamic asset allocation across market capitalizations, encompassing large-cap, mid-cap, and small-cap companies. It identifies industries with robust growth potential, improving fundamentals, and attractive valuations, ensuring an investment approach that remains unconstrained by company size.
The fund evaluates broader sectors at an industry level, targeting those at the bottom of their cycles but poised for significant growth. Companies with poor corporate governance are excluded through rigorous forensic analysis.
Advanced strategies like portfolio hedging with put options, arbitrage opportunities, and cash calls are implemented to mitigate risks.
The fund can invest up to 10% of its portfolio in Real Estate Investment Trusts (REITs) or Infrastructure Investment Trusts (InvITs) when equity market opportunities are limited.
By identifying industries in their growth or turnaround phases, the fund actively allocates resources to capitalize on emerging opportunities, offering investors a chance to benefit from changing market dynamics.
Charanjit Singh, Fund Manager at DSP Mutual Fund, emphasized the fund’s strategic focus, stating, “Timing the entry and exit of themes can be tricky for individual investors and may lead to errors. Redeploying capital after exiting a sector also requires careful evaluation. The DSP Business Cycle Fund is designed to navigate various phases of business cycles while managing risks effectively. We believe this fund will provide investors with a unique opportunity to capitalize on changing market dynamics.”
The New Fund Offer (NFO) for the DSP Business Cycle Fund which opened on November 27, and will remain open for subscription until December 11, 2024.
