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Reasons to buy DSP BlackRock balanced fund


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Reasons to buy DSP BlackRock balanced fund

  1. 1. August 2011 FOR PROFESSIONAL INTERMEDIARIES ONLY Reasons to Buy DSP BlackRock Balanced Fund Why this Scheme? Why Invest? Benefits of Asset Allocation Peak interest rates • Combines wealth preservation effects of debt with high- • Interest rates in the economy are expected to reach the growth potential of equity peak of the cycle and it is a good time to get double-digit • Takes advantage of the low correlation between debt and yields on debt instruments equity • As RBI enters into monetary loosening mode eventually, • Fund manager dynamically rebalances the portfolio at one can benefit from capital gains on the debt portfolio regular intervals or when required to ensure that there is no undue exposure to either asset class Attractive equity valuations, growth still robust • With recent corrections in equity markets, valuations Actively managed portfolio have become attractive (1 year forward Sensex P/E at • Equity allocation is well-diversified and debt allocation is into 14.1x is below the 15-year average) high credit quality, short term papers to minimise credit and • Corporate earnings growth expectations of 17-18% for interest rate risk FY2012 still intact Favourable tax treatment • Balanced funds are taxed at the same rates as equity mutual funds Advantages Over Asset Allocation by Investor An investor can construct a portfolio similar to this fund by Consistent performance across market cycles allocating monies to equity and debt mutual funds. However, • Strong, long-term track record (since 1999) in both absolute investment in this scheme has advantages over such an terms and relative to the benchmark approach. • Assigned CRISIL Mutual Fund Rank 1 under the Open-end • Investment and risk management processes ensure that the Consistent Balanced Scheme category, ranks within Top 10 mandated asset allocation is always followed percentile of the 14 schemes considered, 5 year period • Asset class risk is kept under control by ensuring that there is ending June 30, 2011. Past performance is no guarantee no undue exposure to either asset class of future results. • No additional costs of switching between funds during points of rebalancing Backed by strong investment team • Favourable tax treatment for balanced fund ensures that its • Stable team of experienced fund managers tax treatment is similar to that of equity mutual funds Performance During Different Market Phases Superior Risk-return Profile 30 Mar 02 Jan 24 Oct 04 Nov 29 Jul 40% 2002 2008 2008 2010 2011800700 (7%) DSP BlackRock BSE100 108% Balanced Fund Index DSP BlackRock Balanced Fund CRISIL Balanced Fund Index 30%600 (42%)500 Return CRISIL Balanced 20% Fund Index400 506% (7%)300 92% 10% (42%) CRISIL Composite200 Bond Fund Index 235%100 0% 0 0% 5% 10% 15% 20% 25% 30% 35% 40% Risk Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Source: Internal Return is the average of 1 year rolling returns taken with daily Source: Internal periodicity and Risk is the standard deviation of these datapoints. The period for which the data has been considered is from March 30, 2002 Performance of the Scheme and its benchmark have been normalized to till July 29, 2011. March 30, 2002 is the date of inception of the CRISIL 100 from the date of inception of the benchmark. The period for which the Balanced Fund Index and hence this has been considered. BSE 100 data has been has been considered is from March 30, 2002 till July 29, Index has been used as representative of equity asset class and debt 2011. March 30, 2002 is the date of inception of the CRISIL Balanced Fund has been represented by CRISIL Composite Bond Index. Past Index and hence this has been considered. Past performance is no performance is no guarantee of future results and should not be guarantee of future results and should not be used as a basis for used as a basis for comparison with other investments. comparison with other investments.
  2. 2. Scheme Objective Scheme Performance as on July 29, 2011 An Open Ended balanced Scheme, seeking to generate long Compounded Annualized Return term capital appreciation and current income from a portfolio constituted of equity and equity related securities as well as DSP BlackRock CRISIL Period fixed income securities (debt and money market securities). Balanced Fund – Balanced Asset Allocation Growth Option Fund Index Equity & equity related securities : 65% - 75% Last 1 year 4.30% 3.60% Fixed income securities (debt securities, securitised debt & Last 3 years 13.98% 9.08% money market securities) : 25% - 35% Last 5 years 16.05% 10.66% Since inception 16.81% NA# Investment Team NAV/Index Value Rs. 66.350 3478.18 • Combined expertise of 11 member equity team and 4 member Date of allotment 27th May 1999 fixed income team with active participation of the Chief “Since inception” returns are calculated on Rs. 10/- invested at Investment Officer inception, viz. date of allotment. #Since historical data for the • Fixed income team aided by 5 member Risk & Quantitative benchmark is not available performance has not been compared. Past Analysis team performance is no guarantee of future results and should not be • Closely integrated with BlackRock’s global investment, used as a basis for comparison with other investments. research and risk teams Risk Management DSP BlackRock has developed robust risk management practices to ensure strict regulatory compliance and adherence to its strong internal policies. Independent Risk & Quantitative Analysis team ensures unbiased assessment of risk outside of the investment management team. This helps to ensure a strong risk control and compliance environment. In addition, the Risk & Quantitative Analysis team of DSP BlackRock works closely with the global risks team of BlackRock Inc. to adopt the best practices developed by them worldwide.DisclaimerCRISIL Mutual Fund Rank – The composite performance of DSP BlackRock Balanced Fund is “Very Good performance" performance in the Open EndConsistent Balanced category, and ranks within Top 10 percentile of the 14 schemes ranked in this category. The criteria used in computing the CRISILComposite Performance Rank are Superior Return Score, based on NAVs over the 5-year period ended June 30, 2011, Sectoral concentration, Companyconcentration and Liquidity of the scheme. The methodology does not take into account the entry and exit loads levied by the scheme. The CRISIL Mutual FundRank is no indication of the performance that can be expected from the scheme in future. Ranking Source: CRISIL Fund Services, CRISIL Limited. DSPBlackRock Balanced Fund (DSPBRBalF) is an open ended balanced Scheme, seeking to generate long term capital appreciation and current income from aportfolio constituted of equity and equity related securities as well as fixed income securities (debt and money market securities. Entry load: - Not Applicable. Exitload: Holding Period < 12 months: 1%, Holding Period >= 12 months: NIL Statutory Details: DSP BlackRock Mutual Fund was set up as a Trust and thesettlors/sponsors are DSP ADIKO Holdings Pvt. Ltd. & DSP HMK Holdings Pvt. Ltd. (collectively) and BlackRock Inc. (Combined liability restricted to Rs. 1 lakh).Trustee: DSP BlackRock Trustee Company Pvt. Ltd. Investment Manager: DSP BlackRock Investment Managers Pvt. Ltd. Risk Factors: Mutual funds, likesecurities investments, are subject to market and other risks and there can be no assurance that the Scheme’s objectives will be achieved. As with anyinvestment in securities, the NAV of Units issued under the Scheme can go up or down depending on the factors and forces affecting capital markets.Past performance of the sponsor/AMC/mutual fund does not indicate the future performance of the Scheme. Investors in the Scheme are not being offered aguaranteed or assured rate of return. DSPBRBalF is the name of the Scheme and does not in any manner indicate the quality of the Schemes, their futureprospects or returns. For scheme specific risk factors, please refer the Scheme Information Document (SID). For more details, please refer the Key InformationMemorandum cum Application Forms, which are available on the website,, and at the ISCs/Distributors. Please read the SchemeInformation Document and Statement of Additional Information carefully before investing.