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DSP Banking & Financial Services Fund
Invest in THE Structural Story!
An open ended equity scheme investing in banking and financial services sector
NFO PERIOD
20th Nov - 04th Dec
BFSI Sector has Outperformed Nifty 50 Index on all 10-Year Periods
100%
of the times Nifty Financial
Services TRI has outperformed
the broader Nifty 50 TRI
0%
5%
10%
15%
20%
25%
30%
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Nifty Financial Services TRI Nifty 50 TRI
Source – Internal. Index Values from MFI Explorer. Data for the period 01 Jan 2004 to 30 Sep 2023. BFSI – Banking, Financial Services & Insurance. Nifty Financial
Services Index is taken as a proxy for BFSI sector. Past performance may or may not be sustained in future and should not be used as a basis for comparison
with other investments. These figures pertain to performance of the index/model and do not in any manner indicate the returns/performance of this scheme.
There is no assurance of any returns/capital protection/capital guarantee to the investors in the Scheme. The Scheme being sectoral in nature carries higher risks versus
diversified equity mutual funds, thus one should take controlled exposure to such funds.
Nifty Financial Services TRI vs Nifty 50 TRI - 10 Year Rolling Returns
Source – RBI, Kotak Securities, Morgan Stanley Estimates, Investec, Spark Capital Research, Internal. Note: ^Value of New Business CAGR for the period FY18-
23 is shown for life insurance (listed private players only). Non-life Insurance data excludes reinsurance. NBFCs – Non-Banking Financial Companies. HFC –
Housing Finance Companies. AMC – Asset Management Companies. RoE – Return on Equity. CAGR – Compound Annual Growth Rate. The
sector(s)/stock(s)/issuer(s) mentioned in this document do not constitute any recommendation of the same and the Fund may or may not have any future position in
these sector(s)/stock(s)/issuer(s).
Banking and Financial Services – Thematic But Diversified
Approximate Profits in FY23 Approximate 10-Year PAT CAGR
₹2.5tn | 11%
• Improving Credit Growth
• Benign Asset Quality
• Rising RoE
• Reasonable Valuations
AMC
• Beneficiaries of
Financialisation of Savings
• Big becoming Bigger
• Regulatory changes
pose risk on profitability
Exchanges
• Duopoly market structure
• Long growth runaway led
by rising market participation
• At scale, high margin and
high RoE business models
Depositories
• Proxy play on capital markets
• Digitization play on
financial infrastructure
• High margin and high
RoE businesses
₹1.2tn | 13%
• Strong Growth Momentum
• Benign Asset Quality
• Improving RoE
Loss | NA
• Very low Market Penetration
• Private gaining market share
• High competition may put pressure
on profitability & returns
Banks NBFCs incl. HFCs Life Insurance Non-Life Insurance
₹500bn | 24%^
• Low Market Penetration
• Private gaining market share
• Improving Margins & Return Ratio
• Reasonable Valuations
₹4Tn+
Profit Opportunity
₹82bn | 22% ₹78bn | 21% ₹5bn | 21%
India US China Japan Germany UK
Total Credit to Private Non-Financial Companies as % of GDP 90 151 227 185 126 149
Total Credit to Households as % of GDP 37 74 62 68 54 82
Life Insurance Premium as % of GDP 3 3 2 6 2 8
Non-Life Insurance Premium as % of GDP 1 9 2 2 4 2
Mutual Fund Assets as % of GDP 16 140 18 48 75 78
Credit Card Ownership as % of Adult Population 5 67 38 70 57 62
Credit Card Spending as % of PFCE 6 29 -- 28 0.5 12
Banking & Financial Services in India - Still a long way to go…
Source – World Bank, BIS, Swiss Re Sigma World insurance report No 3 /2023, Kotak Securities, Internal. Total Credit to Households as % of GDP and Total Credit to
Private Non-Financial Companies as % of GDP data are as of Q1 CY23. Life/Non-Life Insurance Premium to GDP is as of 2022. MF Assets to GDP is as of 2020.
Credit Card penetration data are as of 2021. Adult population considers people aged 15 and above. Credit Card Spending as % of PFCE data for China is not available.
PFCE – Private Final Consumption Expenditure.
Fund Structure
^Scheme is enabled to take exposure in global financials as and when opportunities emerge. NBFCs – Non-Banking Financial Companies. Capital Markets include
Brokerages, Asset Management Companies, Exchanges, Depositories etc. The investment approach / framework/ strategy / portfolio / other data mentioned herein are
proposed to be followed by the scheme and the same may change in future depending on market conditions and other factors. The sector(s)/stock(s)/issuer(s) mentioned
in this document do not constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s).
DSP BANKING & FINANCIAL SERVICES FUND
Banking
Private
Banks
Public
Sector
Banks
Financial Services
NBFCs Insurance
Capital
Markets
FinTech
& Others
Global^
Unconstrained Banking & Financial Services Fund
Source – Internal, MFI Explorer. Active Share data of Banking and Financial Services Funds is computed against Nifty Financial Services Index (based as on Aug 2023
portfolios). The investment approach / framework/ strategy / portfolio / other data mentioned herein are proposed to be followed by the scheme and the same may
change in future depending on market conditions and other factors.
Stock-Specific
approach
• Business Fundamentals
over market outlook
• Allocation to Large, Mid &
Small caps can vary widely
based on business fundamentals
Active
Share
• Fund can have high active share
compared to benchmark
(Average active share of funds in the
BFSI category is only 40%)
• Concentrated Approach: The
portfolio is likely to have ~20
stocks reflecting high conviction
strategy of fund manager
International
Business
• Fund Manager can participate
in selective fundamentally
sound businesses internationally
which are not available in India
Risk Factors
For more details on scheme specific risk factors, please read the Scheme Information Document and Key Information Memorandum of the scheme available at the
Investor Service Centers of the AMC and also available on www.dspim.com.
Concentration Risk
• The fund provides exposure
only to the Banking &
Financial Services sector,
leading to sector-level
concentration risk
• This fund attempts to have
only ~20 stocks, thereby
leading to stock level
concentration risk
High Volatility & Drawdown
• This fund can potentially
exhibit higher volatility &
drawdowns as compared
to diversified equity funds
Underperformance
• This fund can underperform
diversified equity funds in the
short-term
Asset Allocation
*Includes only government securities, treasury bills, reverse repos in government securities, tri-party repos and other like instruments as specified by the Reserve Bank
of India/ SEBI from time to time.
For scheme specific risk factors, asset allocation details, please read the Scheme Information Document and Key Information Memorandum of the scheme available at the
Investor Service Centers of the AMC and also available on www.dspim.com.
Under normal circumstances, the asset allocation of the Scheme will be as follows:
Instruments
Indicative Allocations
(% of total assets)
Risk Profile
Minimum Maximum
A. Equity and equity related securities of
companies engaged in banking and
80% 100% Very High Risk
financial services sector
B. Equity and equity related securities of 0% 20% Very High Risk
other companies
C. Debt and Money Market Instruments* 0% 20%
Low Risk to
Moderate Risk
D. Units issued by REITs & InvITs 0% 10% Very High Risk
Scheme Features
Name of Scheme DSP Banking & Financial Services Fund
Type of Scheme An open ended equity scheme investing in banking and financial services sector
Category Thematic / Sectoral
Plans
- Regular
- Direct
Options
- Growth
- Income Distribution cum Capital Withdrawal (IDCW) – Payout & Reinvestment option
Minimum Application
Amount ₹100/- and any amount thereafter
Exit Load Nil
Fund Managers Equity Portion – Dhaval Gada, International Portion - Jay Kothari
Benchmark Nifty Financial Services TRI
SIP/STP/SWP Available
Minimum instalment for
SIP/SWP/STP ₹100/– and any amount thereafter
Taxation Equity taxation
Expense Ratio* Regular plan – Upto 2.25%
Direct plan – Upto 0.5 to 1.0%
*Expense ratio is subject to change based on various factors
Source: Kotak Securities, Capitaline, Investec, Ace Equity, CDSL, NSDL, CAMS DRHP, Internal. CAGR – Compound Annual Growth Rate. RTA - Registrar and Transfer
Agents. *RTACAGR is for last 5 years (FY19 to FY23). Note: The AMC data is based on 28 AMCs which constitute 90%+ of industry AUM.
Capital Markets – Strong growth in last 10 years
0
25
50
75
100
125
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Demat Accounts (# mn)
-
7,000
14,000
21,000
28,000
35,000
42,000
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Mutual Fund AUM (₹Bn)
Revenue Pool (Rs Bn)
Revenue Last 10Y CAGR
PAT Last 10Y CAGR
AMC
178
14%
22%
Exchanges
141
17%
21%
Depositories
16
22%
21%
RTAs
17
10%*
27%*
Technology to accelerate financialization
This can solve five key challenges of the Indian ecosystem: customer identity, digitizing paperwork, shift away from physical cash leading
to formalization, data protection and access to credit.
Credit
bureaus
GST
platform
Regulatory
framework
+
What is it? What is in it?
When was
it launched?
Achievement
India
Stack
Credit layer
-OCEN
Consent layer
-Account
Aggregator
Cashless layer
-Unified Payment
Interface (UPI)
Presence less
& Paperless
layer
-Aadhaar
Democratizing
credit
Launched new open
interface for digitising
all aspects of lending
value chain
Data empowerment
& protection
architecture
Electronic payment
system which
democratizes
payments
Unique universal digital
biometric identity with
open access & digital
record keeping /
documentation
2020
2016/2020*
2016/2010
2009 No. of Aadhaar
cards (bn)
No. of smartphone
users (mn)
Population
(15yrs+) with
bank accounts (%)
UPI Volumes (bn)
UPI Transaction
Value (Rs tn)
FY18 FY23
1.0 83.8
1.2 139
FY14 FY23
0.6 1.38
85 650
49 91
RBI regulates account
aggregator NBFCs which
will work as data sharing
platform
Source: CLSA, Internal

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1_updated_dsp-banking-financial-services-fund-nfo-presentation.pdf

  • 1. DSP Banking & Financial Services Fund Invest in THE Structural Story! An open ended equity scheme investing in banking and financial services sector NFO PERIOD 20th Nov - 04th Dec
  • 2. BFSI Sector has Outperformed Nifty 50 Index on all 10-Year Periods 100% of the times Nifty Financial Services TRI has outperformed the broader Nifty 50 TRI 0% 5% 10% 15% 20% 25% 30% Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Nifty Financial Services TRI Nifty 50 TRI Source – Internal. Index Values from MFI Explorer. Data for the period 01 Jan 2004 to 30 Sep 2023. BFSI – Banking, Financial Services & Insurance. Nifty Financial Services Index is taken as a proxy for BFSI sector. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments. These figures pertain to performance of the index/model and do not in any manner indicate the returns/performance of this scheme. There is no assurance of any returns/capital protection/capital guarantee to the investors in the Scheme. The Scheme being sectoral in nature carries higher risks versus diversified equity mutual funds, thus one should take controlled exposure to such funds. Nifty Financial Services TRI vs Nifty 50 TRI - 10 Year Rolling Returns
  • 3. Source – RBI, Kotak Securities, Morgan Stanley Estimates, Investec, Spark Capital Research, Internal. Note: ^Value of New Business CAGR for the period FY18- 23 is shown for life insurance (listed private players only). Non-life Insurance data excludes reinsurance. NBFCs – Non-Banking Financial Companies. HFC – Housing Finance Companies. AMC – Asset Management Companies. RoE – Return on Equity. CAGR – Compound Annual Growth Rate. The sector(s)/stock(s)/issuer(s) mentioned in this document do not constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s). Banking and Financial Services – Thematic But Diversified Approximate Profits in FY23 Approximate 10-Year PAT CAGR ₹2.5tn | 11% • Improving Credit Growth • Benign Asset Quality • Rising RoE • Reasonable Valuations AMC • Beneficiaries of Financialisation of Savings • Big becoming Bigger • Regulatory changes pose risk on profitability Exchanges • Duopoly market structure • Long growth runaway led by rising market participation • At scale, high margin and high RoE business models Depositories • Proxy play on capital markets • Digitization play on financial infrastructure • High margin and high RoE businesses ₹1.2tn | 13% • Strong Growth Momentum • Benign Asset Quality • Improving RoE Loss | NA • Very low Market Penetration • Private gaining market share • High competition may put pressure on profitability & returns Banks NBFCs incl. HFCs Life Insurance Non-Life Insurance ₹500bn | 24%^ • Low Market Penetration • Private gaining market share • Improving Margins & Return Ratio • Reasonable Valuations ₹4Tn+ Profit Opportunity ₹82bn | 22% ₹78bn | 21% ₹5bn | 21%
  • 4. India US China Japan Germany UK Total Credit to Private Non-Financial Companies as % of GDP 90 151 227 185 126 149 Total Credit to Households as % of GDP 37 74 62 68 54 82 Life Insurance Premium as % of GDP 3 3 2 6 2 8 Non-Life Insurance Premium as % of GDP 1 9 2 2 4 2 Mutual Fund Assets as % of GDP 16 140 18 48 75 78 Credit Card Ownership as % of Adult Population 5 67 38 70 57 62 Credit Card Spending as % of PFCE 6 29 -- 28 0.5 12 Banking & Financial Services in India - Still a long way to go… Source – World Bank, BIS, Swiss Re Sigma World insurance report No 3 /2023, Kotak Securities, Internal. Total Credit to Households as % of GDP and Total Credit to Private Non-Financial Companies as % of GDP data are as of Q1 CY23. Life/Non-Life Insurance Premium to GDP is as of 2022. MF Assets to GDP is as of 2020. Credit Card penetration data are as of 2021. Adult population considers people aged 15 and above. Credit Card Spending as % of PFCE data for China is not available. PFCE – Private Final Consumption Expenditure.
  • 5. Fund Structure ^Scheme is enabled to take exposure in global financials as and when opportunities emerge. NBFCs – Non-Banking Financial Companies. Capital Markets include Brokerages, Asset Management Companies, Exchanges, Depositories etc. The investment approach / framework/ strategy / portfolio / other data mentioned herein are proposed to be followed by the scheme and the same may change in future depending on market conditions and other factors. The sector(s)/stock(s)/issuer(s) mentioned in this document do not constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s). DSP BANKING & FINANCIAL SERVICES FUND Banking Private Banks Public Sector Banks Financial Services NBFCs Insurance Capital Markets FinTech & Others Global^
  • 6. Unconstrained Banking & Financial Services Fund Source – Internal, MFI Explorer. Active Share data of Banking and Financial Services Funds is computed against Nifty Financial Services Index (based as on Aug 2023 portfolios). The investment approach / framework/ strategy / portfolio / other data mentioned herein are proposed to be followed by the scheme and the same may change in future depending on market conditions and other factors. Stock-Specific approach • Business Fundamentals over market outlook • Allocation to Large, Mid & Small caps can vary widely based on business fundamentals Active Share • Fund can have high active share compared to benchmark (Average active share of funds in the BFSI category is only 40%) • Concentrated Approach: The portfolio is likely to have ~20 stocks reflecting high conviction strategy of fund manager International Business • Fund Manager can participate in selective fundamentally sound businesses internationally which are not available in India
  • 7. Risk Factors For more details on scheme specific risk factors, please read the Scheme Information Document and Key Information Memorandum of the scheme available at the Investor Service Centers of the AMC and also available on www.dspim.com. Concentration Risk • The fund provides exposure only to the Banking & Financial Services sector, leading to sector-level concentration risk • This fund attempts to have only ~20 stocks, thereby leading to stock level concentration risk High Volatility & Drawdown • This fund can potentially exhibit higher volatility & drawdowns as compared to diversified equity funds Underperformance • This fund can underperform diversified equity funds in the short-term
  • 8. Asset Allocation *Includes only government securities, treasury bills, reverse repos in government securities, tri-party repos and other like instruments as specified by the Reserve Bank of India/ SEBI from time to time. For scheme specific risk factors, asset allocation details, please read the Scheme Information Document and Key Information Memorandum of the scheme available at the Investor Service Centers of the AMC and also available on www.dspim.com. Under normal circumstances, the asset allocation of the Scheme will be as follows: Instruments Indicative Allocations (% of total assets) Risk Profile Minimum Maximum A. Equity and equity related securities of companies engaged in banking and 80% 100% Very High Risk financial services sector B. Equity and equity related securities of 0% 20% Very High Risk other companies C. Debt and Money Market Instruments* 0% 20% Low Risk to Moderate Risk D. Units issued by REITs & InvITs 0% 10% Very High Risk
  • 9. Scheme Features Name of Scheme DSP Banking & Financial Services Fund Type of Scheme An open ended equity scheme investing in banking and financial services sector Category Thematic / Sectoral Plans - Regular - Direct Options - Growth - Income Distribution cum Capital Withdrawal (IDCW) – Payout & Reinvestment option Minimum Application Amount ₹100/- and any amount thereafter Exit Load Nil Fund Managers Equity Portion – Dhaval Gada, International Portion - Jay Kothari Benchmark Nifty Financial Services TRI SIP/STP/SWP Available Minimum instalment for SIP/SWP/STP ₹100/– and any amount thereafter Taxation Equity taxation Expense Ratio* Regular plan – Upto 2.25% Direct plan – Upto 0.5 to 1.0% *Expense ratio is subject to change based on various factors
  • 10. Source: Kotak Securities, Capitaline, Investec, Ace Equity, CDSL, NSDL, CAMS DRHP, Internal. CAGR – Compound Annual Growth Rate. RTA - Registrar and Transfer Agents. *RTACAGR is for last 5 years (FY19 to FY23). Note: The AMC data is based on 28 AMCs which constitute 90%+ of industry AUM. Capital Markets – Strong growth in last 10 years 0 25 50 75 100 125 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Demat Accounts (# mn) - 7,000 14,000 21,000 28,000 35,000 42,000 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Mutual Fund AUM (₹Bn) Revenue Pool (Rs Bn) Revenue Last 10Y CAGR PAT Last 10Y CAGR AMC 178 14% 22% Exchanges 141 17% 21% Depositories 16 22% 21% RTAs 17 10%* 27%*
  • 11. Technology to accelerate financialization This can solve five key challenges of the Indian ecosystem: customer identity, digitizing paperwork, shift away from physical cash leading to formalization, data protection and access to credit. Credit bureaus GST platform Regulatory framework + What is it? What is in it? When was it launched? Achievement India Stack Credit layer -OCEN Consent layer -Account Aggregator Cashless layer -Unified Payment Interface (UPI) Presence less & Paperless layer -Aadhaar Democratizing credit Launched new open interface for digitising all aspects of lending value chain Data empowerment & protection architecture Electronic payment system which democratizes payments Unique universal digital biometric identity with open access & digital record keeping / documentation 2020 2016/2020* 2016/2010 2009 No. of Aadhaar cards (bn) No. of smartphone users (mn) Population (15yrs+) with bank accounts (%) UPI Volumes (bn) UPI Transaction Value (Rs tn) FY18 FY23 1.0 83.8 1.2 139 FY14 FY23 0.6 1.38 85 650 49 91 RBI regulates account aggregator NBFCs which will work as data sharing platform Source: CLSA, Internal