NFO Alert: DSP Mutual Fund launches DSP Multicap Fund; all you need to know

DSP Mutual Fund announced the launch of the DSP Multicap Fund, an open-ended equity scheme investing across large-cap, mid-cap, and small-cap stocks.

The scheme opened for public subscription on January 08, 2024, and will close on January 22, 2024.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme investing across large-cap, mid-cap, and small-cap stocks. This scheme is suitable for investors seeking

• Long-term capital growth
• Investment in equity and equity-related securities of large-cap, mid-cap, small-cap companies

What is the main objective of investing in this fund?

The investment objective of the scheme is to seek to generate long-term capital appreciation from a portfolio of equity and equity-related securities across market capitalisation. There is no assurance that the investment objective of the scheme will be achieved.

DSP Mutual Fund’s investment framework assists in selecting sound companies that are offered at reasonable rates without favouring either value or growth investing strategies. The company will use the forensic framework and prioritise reasonably priced businesses with medium-term earnings potential. The investment approach will remain style-agnostic, focusing on well-managed companies with scalable opportunities and superior returns on capital employed, aiming for sustained long-term returns.“Mostly, NFOs encourage lumpsum one-time investments. However, we believe these are times to invest via SIP and STPs – basically spreading the investments over the next few years. Hence, we are launching a SIP-focused DSP Multi Cap Fund. It adds more importance to large cap/global stocks to the current popular craze of small and mid-caps. Apart from market caps, there are different phases when the growth style does well and then long stretches when the value style does well. We will blend both these styles in our multi-cap fund to ensure investors don’t need to time them and create tax efficiency,” says Kalpen Parekh, MD & CEO, DSP Mutual Fund.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹100 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such multi-cap funds. Some of these include:

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked against Nifty 500 Multicap 50:25:25 TRI. The trustee may change the benchmark for any of the schemes in the future if a benchmark better suited to the investment objective of that scheme is available at such time subject to the guidelines and directives issued by SEBI from time to time.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be “Nil”.

The AMC reserves the right to revise the load structure from time to time. Such changes will become effective prospectively from the date such changes are incorporated.

Who will manage this scheme?

Chirag Dagli and Jay Kothari will be looking after the investments in this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.