One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.
The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. Let us talk about their – DSP Banking & PSU Debt Fund.
About the DSP Banking & PSU Debt Fund
Investment Objective: The primary investment objective of the scheme is to seek to generate income and capital appreciation by primarily investing in a portfolio of high-quality debt and money market securities that are issued by banks and public sector entities/undertakings.
However, there is no assurance that the investment objective of the scheme will be realized.
Asset Allocation Pattern
- This fund allocates 80% – 100% in money market and debt securities issued by banks and public sector undertakings, public financial institutions and Municipal Bonds.
- It also allocates up to 20% in Government securities, other debt and money market securities including instruments/ securities issued by non-banking financial companies (NBFCs).
Portfolio Composition
- The portfolio holds 95.68% in debts and 4.32% in cash & cash equivalent. The fund invests in high quality debt securities of banks & public sector companies.
Source: Value Research
Top 5 Holdings of DSP Banking & PSU Debt Fund
| Name | Instrument | Weightage % |
| HDFC Bank Ltd SR US004 Debenture 7.65 25/05/2033 | Debenture | 6.67 |
| National Bank for Financing Infrastructure and Development SR NABFID.43 Debenture 16/06/2033 | Debenture | 6.63 |
| Small Industries Devp. Bank of India Ltd SR IV Bonds 7.79 19/04/2027 | Bonds | 5.43 |
| State Bank of India SR I Debenture 7.81 02/11/2038 | Debenture | 4.82 |
| Indian Railway Finance Corporation Ltd SERIES 129 Debenture 8.45 04/12/2028 | Debenture | 4.27 |
Source: Value Research
Performance
| DSP Banking & PSU Debt Fund | CRISIL 10 years Gilt Index | |
| CAGR (%) | CAGR (%) | |
| 1 Year | 6.89 | 6.23 |
| 3 Years | 5.22 | 3.7 |
| 5 Years | 7.00 | 6.04 |
| Since Inception | 7.92 | 6.67 |
Source: Value Research
The fund was launched on 14th Sept. 2013.
Fund Manager
- Shantanu Godambe has been managing this fund since June 2023. He has 16 years of rich experience in this field.
- Karan Mundhra has been managing this fund since July 2023. He has total 16 years of experience in this field.
Who Should Invest in DSP Banking & PSU Debt Fund?
Consider this fund if you
- Are a relatively new debt market investor.
- Are willing & able to remain invested for at least 3 years.
- Diversify your portfolio of FDs.
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Why Invest in this Fund?
- It earns potentially stable & consistent investment income.
- The fund manages high quality portfolio.
- It is a credible alternative to a single 3-year bank FD.
- Active management by managers can aid in generating alpha over FDs.
Time Horizon
- One should look at investing for a duration of at least 3 years.
- Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.
Conclusion
The DSP Banking & PSU Debt Fund is a good option for those who are new to debt market and wants to invest in an alternative to FDs . The fund has consistently outperformed its benchmark in since inception.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
