DSP Investment Managers announced the launch of DSP Quant Fund, an open-ended equity scheme that systematically follows investment rules tested over market cycles with minimum human biases. The new fund aims to deliver superior returns as compared to the underlying benchmark – BSE200 TRI - over the medium to long term using rational principles combined with scientific risk management.
DSP Quant Fund follows a three step process of elimination, selection and assigning weights. It aims to eliminate long term value detractors, select durable sources of alpha and follow a quantitative weighting approach that aims to ensure adequate diversification through stock and sector concentration limits.
The fund starts with BSE200 as the universe. The elimination process screens out companies that have very high debt, excessive price volatility and inefficient capital allocation. Such stocks are removed from the consideration set. The remaining universe is ranked based on multiple factors representing quality, growth and value. These factors have been chosen based on their demonstrated long term excess return across geographies and market cycles. This process results in the selection of about 50 companies to whom appropriate weights are allocated quantitatively. The portfolio is rebalanced semi-annually.
DSP Quant Fund would be managed by Anil Ghelani. The NFO is scheduled to open on May 20 and close on June 3, 2019.
