DSP BlackRock Mutual Fund has launched a new fund DSP BlackRock Focus 25 Fund, an open ended equity growth scheme. The face value of the new issue will be Rs 10 per unit.
The objective of the scheme is to generate long-term capital growth from a portfolio of equity and equity-related securities, including equity derivatives
The New Fund Offer (NFO) will open for subscription from April 23 to May 21, 2010. The scheme re-opens for continuous sale and repurchase not later than June 20, 2010.
- The scheme offers growth and dividend option. Dividend option offers payout and reinvestment facility.
- The minimum investment amount is Rs 5000 and in multiples of Re 1 thereafter.
- Entry load nil for the scheme. The exit load 1% for holding period less than 12 months and nil for holding period above & up to 12 months.
- The scheme will allocate 65% to 100% of assets in equity and equity related securities, which are amongst the top 200 companies by market capitalization. It would invest up to 0-20% of assets in equity and equity related securities, which are beyond the top 200 companies by market capitalization. It would further allocate up to 35% of assets in debt securities, money market securities and cash & cash equivalents.
- The scheme's performance would be benchmarked against BSE Sensex.
- The scheme would be managed by Apoorva Shah.
What is this about?
Typically, mutual fund (MF) schemes diversify their portfolios across sectors and scrips so that a fall in one or a few holdings doesn’t drag the portfolio down. But that doesn’t mean that a less diversified portfolio doesn’t work if managed well. Here’s where DSP BlackRock aims to make a difference. The new fund will invest in 20-25 stocks at all times against 50-70 stocks that other diversified schemes, typically, hold.
Holding a tight portfolio helps if the fund manager can consistently make correct calls and spot opportunities in time. A rise in a few stocks is enough to help the fund make handsome gains. The NFO will also invest at least 80% of its portfolio in scrips of the BSE 200 index. Sticking to scrips of BSE 200 will ensure that the quality of the fund’s portfolio is high.