Mumbai, May 13, 2019: DSP Investment Managers Pvt. Ltd. Today announced the launch of DSP Quant Fund, an open ended equity scheme that systematically follows investment rules tested over market cycles with minimum human biases. The new fund aims to deliver superior returns as compared to the underlying benchmark – BSE200 TRI – over the medium to long term using rational principles combined with scientific risk management.
DSP Quant Fund follows a three step process of elimination, selection and assigning weights. It aims to eliminate long term value detractors, select durable sources of alpha and follow a quantitative weighting approach that aims to ensure adequate diversification through stock and sector concentration limits.
The fund starts with BSE200 as the universe. The elimination process screens out companies that have very high debt, excessive price volatility and inefficient capital allocation. Such stocks are removed from the consideration set. The remaining universe is ranked based on multiple factors representing Quality, Growth and Value. These factors have been chosen based on their demonstrated long term excess return across geographies and market cycles. This process results in the selection of about 50 companies to whom appropriate weights are allocated quantitatively. The portfolio is rebalanced semi-annually.
DSP Quant Fund would be managed by Anil Ghelani. The NFO is scheduled to open on May 20 and close on June 03, 2019.
Speaking on the occasion, Mr Kalpen Parekh, President, DSP Investment Managers said, “Investing is blend of Art which is the judgement and beliefs of fund managers & Science of using these principles more consistently and reducing personal biases. The DSP Quant Fund is a mix of converting good investment principles of having good companies at good prices held for long periods of time into rules and then following these rules consistently without our personal biases. These rules have been tested for their effectiveness in generating better than benchmark returns. We are happy to bring a scientific equity product that respects the good investment principles that have generated durable alpha and designed in a model to minimise biases.”
Aparna Karnik, Senior Vice President &Head – Risk and Quantitative Analysis, DSP Investment Managers said “DSP Quant Fund is designed to provide investors a well-diversified large cap oriented core portfolio built around principles of quality, growth and value. We believe such ‘smart beta’ funds combine merits of both active and passive investing in a cost efficient manner and can play a complementary role in an investors overall portfolio”
