Mumbai, November, 2024.

DSP Mutual Fund has announced the launch of the DSP Business Cycle Fund, an open-ended equity following business cycles-based investing theme. This fund provides investors with the opportunity to invest across various market capitalizations, including large, mid and smallcap companies. The investment strategy focuses on dynamically allocating assets to industries and sectors that exhibit strong growth potential, improving fundamentals, and attractive valuations.

The DSP Business Cycle Fund employs a framework-driven approach to select industries and companies with high growth or turnaround potential. It allows for active allocation to sectors during upcycles while also implementing cash calls and other risk management strategies. By focusing on identifying strong industry cycles, the fund offers an unconstrained investment approach across market capitalizations, enabling investors to participate in growth opportunities regardless of company size.

The fund categorizes its investment universe into broader sectors and evaluates them at the industry level. It aims to identify industries that are at the bottom of their cycle with potential for significant growth, trading at low valuations compared to benchmarks. Additionally, the fund utilizes dedicated forensic analysts to exclude companies with poor corporate governance, even if they show strong growth prospects.

In terms of risk management, the fund incorporates various strategies including portfolio hedging through put options and arbitrage opportunities. Furthermore, it maintains the flexibility to invest up to 10% of its portfolio in Real Estate Investment Trusts (REITs) or Infrastructure Investment Trusts (InvITs) when equity market opportunities are limited.

 “Timing entry and exit of themes can be tricky for investors on their own and may sometimes lead to errors. Redeploying capital after exiting a sector also calls for a thorough evaluation. DSP Business Cycle Fund is strategically designed to navigate through different 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,”said Charanjit Singh, Fund Manager, DSP Mutual Fund.

The New Fund Offer (NFO) for the DSP Business Cycle Fund will open for subscription on November 27, 2024, and will close on December 11, 2024.