02/12/2023
We try to make a case
for investment in MFs in infrastructure sector and particularly in DSP India
TIGER Fund.
We have short listed funds to create a sample for peer group comparison—as under
· Funds should have a minimum corpus of Rs.1000 crores
· Funds should have a minimum rating of 2*
· Funds should have performance of 10 years in the list
DSP India TIGER fund is a top-notch performer in our opinion. Read on----
The fund –set up on 11/06/2004—has a corpus of Rs.2466 Cr. Next only to ICICI Prudential MF and Nippon India MF.
Now coming to performance, DSP India TIGER fund has featured consistently in top quartile performance.
It has returned (CAGR unless otherwise stated) as follows:-
|
CAGR |
Period |
Rank |
|
15.76% |
15 years |
3/15 |
|
18.56% |
10 years |
6/19 |
|
20.33% |
5 years |
6/20 |
|
36.99% |
3 years |
7/20 |
|
33.03% (Absolute) |
1 year |
8/21 |
It
has one of the lowest expense ratios in the peer group—2.07.
It has a standard deviation of 16.23 (range of variance of returns from the mean average returns) It has a beta of 0.60 thus indicating that it is less volatile. Every rise of 1 point in the sector—the fund will only rise by 0.60. This implies that the fund effectively protects the downside. The fund manager has been able to generate an Alpha of 9.37 (returns over and above the benchmark due to his expertise and experience.)
Compared to DSP, ICICI Prudential Infrastructure fund has not been able to match the performance of DSP. Although it has a bigger corpus of 3345 Cr. Its performance has been non-consistent. It has a peer group performance ranking of 7/15 (in the 15-year period), going up to 11/19 in the 10-year period. The rank markedly improved to 4/20 during the 5-year period and again deteriorating to 11/21 during 1 year period. A higher alpha of 9.77 has been generated due to higher range of variance (standard deviation) of 17.90 and a higher beta of 0.72 compared to DSP.
On the other hand, while Nippon India Power & Infra fund has also been a consistent performer, its risk stats do not match with that of say DSP. Despite a higher range of variance of 17.18%, a low beta of 0.67, it could generate an Alpha of only 6.80 (compared to 9.37 of DSP)
So, who would
you like to go with?
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