DSP Mutual Fund has announced a new fund offer (NFO) for the DSP Healthcare Fund from 12th November to 26th November 2018. This is the first foray by DSP MF into the healthcare and pharmaceutical space and follows the SEBI filing of the IDBI Healthcare Fund in September 2018 as well as launch of the Mirae Asset Healthcare Fund earlier this year. The entry of DSP Mutual Fund in this segment may provide an as of yet untapped opportunity for investors to grow their wealth with this AMC, however like all thematic schemes, this is a potentially high risk-high return investment option. This fund is open-ended in nature hence investors will be able to invest in/redeem their investments on all business days.
This scheme from DSP Mutual Fund is thematic in nature and will primarily invest in equities/equity derivatives of healthcare and pharmaceutical companies. As per SEBI guidelines, asset allocation to equities/equity derivatives of these sectors will be between 80% and 100% of total scheme assets while equities of other sectors may account for up to 20% of total assets. DSP Healthcare Fund can allocate up to 20% of assets in money market securities, securitized debt and debt instruments while investment in InvITs (Infrastructure Investment Trusts) and REITs (Real Estate Investment Trusts) may account for up to 10% of the scheme’s portfolio. This fund is also allowed to invest in foreign equities and repo of corporate debt securities as well as engage in stock lending within limits and guidelines as specified by SEBI from time to time. DSP Healthcare Fund will however not invest in credit default swaps and foreign debt securities.
S&P BSE Healthcare Index will serve as benchmark for the DSP Healthcare Fund. This index is ideally suited as the scheme’s benchmark because it features key players in the Indian healthcare and pharmaceutical space across market caps. Some of the key constituents of this index are Sun Pharma, Cipla, Dr. Reddy’s Labs, Apollo Hospitals, Dr. Lal Pathlabs, Fortis Healthcare and GlaxoSmithKline. As of 31st October 2018, the total returns posted by this index for the 1 year, 3 year and 5 year periods were 3.70%, – 6.06% and 9.52%. The index has thus undergone correction in the medium term while it seems to be on the road to recovery in the short term.
DSP Healthcare Fund will be co-managed by Aditya Khemka, Vinit Sambre and Jay Kothari. While this is the first DSP MF scheme to be managed by Khemka, Sambre and Kothari are veterans who are already managing various leading funds for the AMC. Some of the top schemes managed by them include the DSP Midcap Fund, DSP Small Cap Fund, DSP Natural Resources and New Energy Fund as well as DSP World Mining Fund. Among these, DSP Small Cap Fund opened up for fresh subscriptions through SIP recently after a 2 year gap and has featured 5 year returns of 26.90% (as of 9th November 2018). This scheme has however undergone significant correction in the past year having posted 1 year returns of -16.40% ,which could indicate a possibility of picking up scheme units at relatively cheap valuations.
Also Read: DSP MF launches NFO of DSP Corporate Bond Fund
Key Information about the DSP Healthcare Fund NFO
| NFO Period | 12th November to 26th November 2018 |
| Minimum Investment | Rs. 500 |
| Benchmark | S&P BSE Healthcare Fund |
| Fund Managers | Aditya Khemka, Vinit Sambre and Jay Kothari |
Other Funds by DSP Asset Management
| Scheme Name | 3Y Returns (%) | AUM (Rs. Cr.) | Category |
| DSP Equity Direct Plan | 14.11 | 2678.36 | Multi Cap Fund |
| DSP US Flexible Equity Fund | 14.08 | 179.18 | Sectoral/Thematic Fund |
| DSP Equity & Bond Fund | 11.68 | 7189.75 | Aggressive Hybrid Fund |
| DSP Tax Saver Fund | 11.05 | 4366.38 | ELSS |
| DSP Focus Direct Plan | 10.35 | 2961.32 | Multi Cap Fund |
| DSP Equity Opportunities Fund | 10.28 | 5559.95 | Large & Mid Cap Fund |
| DSP Midcap Fund | 10.01 | 5719.8 | Mid Cap Fund |
| DSP Top 100 Equity Fund | 9.85 | 3097.9 | Large Cap Fund |
| DSP Government Securities Fund | 9.28 | 210 | Gilt Fund |
| DSP Dynamic Asset Allocation Fund | 9.16 | 844.71 | Dynamic Asset Allocation |
| DSP Short Term Fund | 8.11 | 3628 | Short Duration Fund |
| DSP Strategic Bond Fund | 8.11 | 1350.51 | Dynamic Bond Fund |
| DSP Banking & PSU Debt Fund | 8.09 | 1629.22 | Banking and PSU Fund |
| DSP 10Y G-Sec Fund | 8.02 | 36.57 | Gilt Fund with 10 year constant duration |
| DSP Low Duration Fund | 7.91 | 4993.08 | Low Duration Fund |
| DSP Global Allocation Fund | 7.85 | 30.35 | Sectoral/Thematic Fund |
| DSP Equity Savings Fund | 7.38 | 1619.88 | Equity Hybrid Saving Fund |
| DSP Savings Direct Plan | 7.18 | 45.17 | Money Market Fund |
| DSP Ultra Short Fund | 6.9 | 4005.47 | Ultra Short Duration Fund |
| DSP Liquidity Direct Growth | 6.89 | 17472.46 | Liquid Fund |
Also Read: Pharma Mutual Funds
{Data as on Feb 19, 2020; Source: Value Research}