Women and Investments - The road less travelled.

This women’s day, we at ORO Wealth are celebrating by empowering women to take charge of their investments. We all know who the boss is at home. So, we took a look at myths and reasons and found why women should boss the finances too. To the men out there, this is not a joke.

Women are breaking out from their shells in so many cases. From Aisha De Sequeira heading Morgan Stanley and Archana Barghava chairing United Bank of India, there are more examples of the women disrupting the status quo. But if you ask me, I’d say it’s not enough. 

Men continue to dominate the Indian securities market while the percentage of women investors has remained at less than 25 percent. Since when has such high rates of male domination led to anything good? This domination too, is only possible because of the healthy platform women provide back at home. Women can take charge of finance. Most businesses are like households anyway. 

You see, women aren’t clueless when it comes to investing. The problem, as with most problems is a matter of perception. We have assigned roles for everything under the sky and classified them under men and women. This has to change. If a woman can nurture something as complicated as life, she can nurture money as well. Easily. They have the right of passage to their goals by way of investment.
What a man can do, a woman can too. It’s as simple as that. Women are always adept at seizing control of things and the more opportunities they are given in financial matters, the more they will grow as an investor. They can create their assets, manage their accounts and who is to say they won’t be better than their counterparts in doing that? Who’s to say their efforts might help men from unfortunate incidents?

We took a look at what happens when women invests and busted some myths along the way.

Men are better investors:

The myth that men are better investors is just that. A myth. According to fidelity investment’s new data, where they sifted through more than 8 million accounts women not only saved more than men (0.4 percent) and also their investments earn more annually (0.4 percent). A raft of studies show that women do more research, are better at matching their investments to their goals, trade less and remain calmer during market upheavals.

Women investors carry more risk:

Years and years of experience of managing the household finances, from vegetables to the rent under strict budgets have wired an ideal investor in an Indian woman’s mind. They are more disciplined than their male counterparts. This helps them fetch better returns unlike men who trade up to 45-50 percent more frequently.

Everybody faces financial decisions but most of them are taken by men. There comes a point in every woman’s life where they will solely be responsible for the business - whether from staying single, experiencing divorce or just living longer. So it’s vital that this bias is demolished and women start making more decisions, financially.

We took the liberty and listed down a couple of reasons why women should invest, and regularly.

        A level playing field – Women know money, but they often lack confidence in their abilities. Allowing them to invest creates a level playing field and is a major boost to women empowerment in the finance sector. This balance creates happier, wealthier families.

        Owning assets is empowering – Women have always remained caregivers to family and have given up multiple opportunities that might come their way for the family, which means they’ve developed a sense of what to hold on to and what to let go of. It’s also important to know that having assets in your name should not be limited to gender.

        Women live longer - Studies have shown that women live for longer than their male counterparts and don’t involve themselves in bragging. “Men on the other hand, regard their stock picks as a sport that comes with bragging rights.” said George Gagliardi, a financial planner in Massachusetts. This gets them into trouble while women sail through all this with a long term view of life.

        Being a good parent - Our predefined goals of who should bring home the bread and who should make the sandwiches have stopped us from realizing that women can invest for multiple reasons spanning from travel to kid’s education to  emergency funds. It does not matter which parent provides the financial stability, only that the marriage is stable. Marry for love, invest for financial stability.
Financial equity within a marriage leads to greater mutual respect which makes the marriage complete.

Our Advice:

We recommend to all women readers that if you don’t invest your money, start investing irrespective of how small the amount be. While your husband or father investing is a good thing, you too should get involved in the investment process. You must ask questions and keep a track of your money irrespective of how much you earn vis-à-vis your male counterpart.

Even starting a small SIP will help you get the feeling of investing so that you can see your money grow. Your confidence will grow along with it. While earning money undoubtedly makes you an independent woman, it is also important to think long-term. Irrespective of who is going to be with you in the future, it is very important to plan for yourself so as to make yourself financially independent.

This women’s day, gift yourself financial freedom and start investing. We at ORO, pledge to stand by your side and help you take the first step towards your financial independence. Should you have any questions, feel free to connect with us at connect@orowealth.com and we shall be glad to help.

Happy International Women’s day!! 

What is a Folio Number ?

Folio number is one of the most known words off late particularly after demonetization as the investments in equities and equity-related securities have increased manifold.

Mutual funds need some mechanism to store record pertaining to investments, transactions made by an investor. This information is also required to ensure each investor receives the money they are entitled to and also to determine the fees applicable to those investors. Given there is huge number of investors who may/may not have similar names, it is technically impossible to use their name as unique id; generally, a numeric unique id is allocated. Thus, folio number, similar to a bank account number, is a unique number provided to an investor at the time of investment. The asset management company (AMC) uses it to check the holdings in the name of the person to whom the folio is associated.

The unique number, though mandatory to be provided by every fund house, differs from fund house to fund house. New investors at the time of applying for investment in mutual funds typically key-in all their information which is sought by the fund house to open an account and once the account is open all the information presented in the form is mapped to a unique folio number which is then allotted to that individual. This unique number becomes the identifier for the investor.

Benefits of folio number

Following are the benefits of folio number:

·        A folio number may be asked by the fund house from an investor to ensure the accuracy of the investor.
·       Like a bank account number, the folio number can be used as a way to uniquely identify fund investors and keep records of items such as how much money each investor has placed with the fund, their transaction history, and contact details.
·       The concept of folio number is very beneficial to the fund house as it helps them maintain a credible record system for every investor.
·       An investor can make multiple purchases across asset class and funds using the same folio number within the same fund house. This saves an investor from having different folio for each fund he/she is invested in and also enables the investor to easily track his her portfolio on a regular basis.

Multiple folios

Having multiple folios is more to do with the operational aspect of investing in mutual funds. There were some benefits of investing through multiple folios with the same fund house in the past – if you invest in a fund house with multiple folios and you have gained in one folio while a loss in other, individual had the flexibility of choosing which investment to sell first depending on their tax efficiency. However, if investments are in a single folio – first in/first out principle is used from taxation point. For equity investment, which is generally a long-term endeavor, it is, therefore, advisable to prune your folios. For administrative convenience, mutual funds provide with the facility of consolidating all folios in a master folio.

Where to find mutual fund folio?

Following are the ways by which you can retrieve your folio number:

Mutual Fund Statement:

When an individual purchases mutual fund scheme from the Asset Management Company or the fund house, the individuals receives a set of documents via Email and SMS. Folio number is found in a mutual fund statement that is very similar to your bank account statement. The mutual fund statement, received typically every month, summarizes your mutual fund investments. While the format of fund statement differs in layout across fund houses, the basic components of the fund statement remain same.  

The above image tells you what a fund statement looks like. An individual should keep a record of his/her folio number, as it is the reference for the investment made. It is a good practice to ensure that the folio number is same when any additional investment is made in an AMC’s mutual fund scheme. If you do not use the same folio number, you will end up with many folios over time and it will make investments tracking cumbersome.

Consolidated Account Statements (CAS):

As the name suggests, consolidates account statement reflects money holding in a scheme. It reflects the scheme in which an investor is invested into, the amount invested, purchase price and the units allotted. Other information contained in CAS includes folio number, bank details, mailing, and contact details, nominee details, etc. The mutual fund industry issues CAS across fund houses on a monthly basis.


Folio number can also be found in the email and the SMS that are received from asset management company or fund house.

Should investments in gold be a part of your portfolio?

All of us have seen or heard advertisements related to investments in gold. Hedge against the market fall is a strong pitch for any gold or gold-related products. But the basic query of the layman on whether gold should form part of his strategic portfolio, still remains unanswered. In this article, we will assess if investments in gold should be a part of your portfolio?
·         Safe haven – Gold is traditionally viewed as one of the safest investment instrument. It is an instrument that has the potential to appreciate during times of geopolitical crisis or political instability. A wise investor normally looks at gold as an insurance for the portfolio against any financial market crisis.  Any domestic or global events that has a potential to make the financial market participants nervous like Brexit, Geopolitical tensions in Middle East, nuclear threat from North Korea, Tightening of monetary policies by central banks, makes buying gold-related instruments as a lucrative proposition
·         Hedge against inflation – Gold is a classic product that provides hedging against inflation given price of gold generally tends to rise during an inflationary period. With an increase in the cost of living, the value of gold holdings also increases thereby protecting an investors' purchasing power. We, at ORO, found that while inflation increased by around 8-9% over the past 15 years, gold has offered around 12-14% returns during the same period thus protecting an investor from inflation.
·         Liquidity – Gold is an acceptable instrument to provide easy liquidity either a security for gold loans or can be sold to any jeweller.
·         Source of diversification - We have been always taught in school that one should never keep all eggs in one basket. The proverb applies very well to the financial market and this is nothing but diversification. Diversification in simpler language is nothing but spreading investments across different asset classes. In order to safeguard investments across different investment instruments, an investor should ideally invest in instruments which are negatively correlated or have a low correlation which means that rise or gain in one asset category is typically accompanied by nearly equal and opposite movement in another asset category. Gold as an asset class has a negative correlation to equities and has a low correlation to fixed income asset classes. Thus, investment in gold helps in reducing volatility of a portfolio without necessarily sacrificing expected returns.

How to look at gold allocation in the portfolio
Gold because of its negative correlation with equity markets, lower correlation with debt instruments, ability to leverage, safe haven status and protection against any financial crisi,  thus, gold should always form a part of an investor's portfolio. However, what is more, relevant and important at this point is how much of the portfolio should be allocated to gold. We believe for an investor ideal approach would be to diversify investments across all three key asset class namely - equity, debt and gold. This approach, to our belief, provides added advantage of an improved risk-return profile of the overall portfolio. Given the return and risk profile of gold, it should not account for more than 15% of the total portfolio.

How to invest in gold?
Now when the question of should an investor invest in gold is amply clear, let us look at the ways of investing in gold.
·         Physical Gold – Physical gold can be bought in different forms such as gold bar and gold coin. These forms can be in different sizes such as 1 gram, 2 gram, 5 gram,10 gram, 20 gram and 50 gram and the likes. However, holding physical gold also brings in certain disadvantages such as no utility value, the risk of being stolen, require an adequate arrangement for storing, trust issues with purity of the gold.
·         Jewellery – one of the other ways of creating utility for physical gold is to convert gold into jewellery. It goes on without saying that in India demand for gold jewellery is always soaring. However, this brings in conversion charges from raw gold to jewellery in form of making charges and/or wastage taken by jewellers.
·         Gold Funds and Gold ETFs – This mode is becoming increasingly acceptable from an investment perspective. Gold fund and/or ETF are nothing but passive investment in gold. In gold funds, while an Asset Management Company invests in gold on an investors behalf and provides units in the fund in return for an investment. Thus, a gold fund provides an opportunity to small investors to invest in gold without having a concern in relation to quality of gold, storage etc. Gold ETFs are gold funds that are traded in an exchange. Gold ETF allows an investor to trade and invest in gold in real time through exchanges by way of Gold ETFs
·         E-Gold – E-gold is an instrument that can be bought on a commodity exchange through a broker who is a member of the exchange. Typically, each unit of e-gold is equivalent to 1 gram of physical gold. This e-gold is held in a demat account. E-gold has ad advantage of getting converted into physical gold at any time by way of re-materialization.
·         Shares of companies dealing in gold – An investor may also look at investing in companies that are engaged in gold mining and/or gold trading. However, by way of investing in shares of these companies, an investor not only thinks positively about the future prospects of gold prices but also have enough faith in the management of the company.
·         Sovereign Gold Bonds – The government, with an aim to reduce to parking of physical gold in Indian households, have launched the sovereign gold bond scheme. These bonds offer the investors a return that is equivalent to holding physical gold along with a nominal interest in the investment. Given the money is lent to the government in this case the safety is completely assured. Further, for investment in such bonds, there is no requirement of opening a demat account. Liquidity in these bonds are offered by trading in stock exchanges and the government also provides a tax exemption on these bonds if held until maturity.

To conclude we can say that gold should be a part of every investors' portfolio but its allocation should not be more than 15% of the overall portfolio with gold funds and sovereign gold bonds appearing to be the best way of holding Gold though the choice really boils down to what is convenient for an investor.

Long Term Capital Gain Tax – a Blessing in Disguise

The Finance Minister, Mr. Arun Jaitley shocked the investor community when he re-introduced Long Term Capital Gain Tax in his Budget speech on 1st February, 2018. Over the years, one of the major drivers for flows into equities was the tax free status of the gains after 1 year. However with the re-introduction of the taxation, that benefit will not be there from 1st April, 2018. Though, it is a bitter truth for the equity investors, it can actually be a blessing in disguise for your personal finances. This has given a chance to all the investors to relook at their portfolio and rebalance the same towards optimal asset allocation.
Equity mutual funds are generally held in the portfolio for long term. Thus, most of the times, the portfolio gets flooded with a number of schemes, where either the underlying stock portfolio is common leading to portfolio overlap, higher allocation towards a particular asset class, some non-performing scheme dilute the performance of better performing scheming leading to overall underperformance of the portfolio, Regular (commission) schemes taking a piece out of the overall return pie etc. Thus, with the long term gains being at taxed at 10% from April 2018, provides an opportunity to relook at the portfolio and align it to your future goals.

A 3-step guide to use LTCG tax to your advantage:

Ø  Identify the schemes which are under Regular plan
Regular (commission) plans are the ones where every year, a part of your returns is paid out to the intermediary as commissions, thus leaving the end investor with lower returns. Thus, the budget announcement can be used as a catalyst to relook at the portfolio and identify schemes which are under Regular plan and long term in nature, to either switch them to Direct plan or sell them, if they are not a fit for overall portfolio.
Confused about which schemes are Regular, please log on to www.orowealth.com and get your free Portfolio Health Check done under our premium tools

Ø  Relook at the overall portfolio allocation
Does your portfolio allocation matches your risk profile? Does your portfolio mainly consists of schemes that has performed well only in last 1 year? Are you invested heavily in equities and anticipate some obligations to be funded in the near future? All this questions can be answered by looking at the current portfolio allocation. It is very important to align the portfolio with individual’s risk profile and future goals. Identify whether a 60% Large cap and 40% debt suits your requirements or whether a 100% debt allocation serves your purpose. Identify the schemes which are not a fit and are held for more than 1 year (long term), sell them by 31st March, 2018. Whenever in doubt, please consult your financial advisor.

Ø  Filter out the Performers from the Draggers
It is very important to evaluate which schemes are providing a boost to the overall portfolio and which ones are actually dragging the portfolio performance down. Also it is important to look at the portfolio of the individual schemes. A scheme maybe a underperformer in the past, but maybe a winner for the future. So apart from the historical returns, take into account the holdings, fund manager performance, volatility of returns, asset composition etc. Thus all the schemes which are dragging your portfolio down and are held for more than 1 year (long term), can be sold by 31st March, 2018, so that the gains are tax free and the amount can be channelized to better performing schemes

LTCG tax will be implemented from 1st April, 2018. Thus instead of panicking over the situation, it is a great opportunity to relook at the individual portfolio and undertake necessary re-balancing till 31st March, 2018 to avoid taxes and re-aligning the portfolio towards future goals

Demystifying Budget 2018

Budget 2018 was on the expected lines of the Pre-Budget note released by ORO Wealth. As envisaged, the Budget has a strong focus on agriculture, rural development, MSMEs and Affordable housing. The Government reaffirms its stance on Sabka Saath, Sabka Vikas, by focusing on agriculture and related activities, rural development, ease of doing business for SMEs/MSMEs. The budget had nothing to cheer for salaried class and corporate India. For investor community, re-introduction of long term capital gain tax was a major change. The Government has revised the fiscal deficit target for FY18 to 3.5% (earlier budgeted was 3.2%), for FY19 it is estimated at 3.3%. However, the government is committed to fiscal discipline by targeting 3% fiscal deficit from FY19 onwards.

On the Personal Finances front, following are the important changes:
·         Long term capital gain tax of 10% is applicable on gains which exceed more than INR 1 lac on all equity and equity mutual funds. However for the purpose of calculating gains, the cost price to be taken is higher of purchase price or price as on 31-Jan-2018.
We recommend to redeem all your long term mutual fund schemes which are under Regular (commission) plans and purchase Direct plans before 31-Mar-2018. This will lead to tax savings on units sold and also better returns by investing in Direct plans

·         Equity-oriented mutual funds are liable to deduct 10% on distributed income
This brings parity between Growth scheme and Dividend schemes of equity mutual funds. However, the benefit of exemption limit of INR 1 lac is not available for dividend schemes for computing long term capital gains. Thus we recommend to switch your long term schemes under dividend option of equity mutual funds to growth option

·         Time-limit to get exemption from capital gains on sale of land and building has been extended to 5 years from 3 years

·         Education cess has been increased to 4% from 3%

·    Standard deduction of INR 40,000 allowed to salaried class in lieu of transportation and medical allowances

·         The limit of deduction for medical premium has been increased to INR 50,000 from INR 30,000

Coporate Taxation
·         Corporate reduced to 25% for entities having a turnover of less than INR 250 crs

Below are the key highlights and impact on various sectors:

Big Positive
·      Strong emphasis to double farmers income by 2020
·      Raising kharif MSPs to 1.5x of costs
·      Creation of Agri-Market Infrastructure Fund of INR 2,000 crs
·      Doubling of allocation to Food processing sector to INR 1,400 crs
·      Development of Fisheries and Animal Husbandry with an allocation of INR 10,000 crs
Big Positive
·      Allocation for infrastructure development of INR 5.97 lac crs (up 21% YoY)
·      Allocation for railways of INR 1.46 lac crs (up 20% YoY)
·      Allocation for roads of INR 1.21 lac crs (up 10% YoY)
·      99 cities selected under Smart City scheme
·      Plan to create 3.17 lac km roads of rural roads, 51 lac houses and issue of 1.75 cr new electricity connections in rural areas
Affordable Housing
Big Positive
·      Allocation towards affordable housing of INR 64,500 crs (up 120% YoY)
·      Dedicated Affordable housing fund under Pradhan Mantri Awas Yojana
·      Credit linked subsidy scheme allocation increased to INR 1,900 crs from INR 1,000 crs
Insurance Sector
Big Positive
·      National Health Protection scheme to cover 10 crs families (approx. 50 cr people) providing health insurance upto INR 5 lac p.a. per family for secondary and tertiary care hospitalization
Banking and Financial Services
· Relief from MAT for companies under Insolvency and Bankruptcy code. They buyer can now adjust carry forwarded losses and unabsorbed depreciation from book profits. This should improve NPA recovery
·      Regional Rural Banks can raise capital from equity markets
Consumer / Retail
·      Boost to rural demand on account of focus on agricultural development
·      Increase in import duties to benefit domestic manufacturers

Equity Market Outlook
The long term capital gain tax really spooked the market which has led to knee-jerk reaction. However the long term growth story of India is still positive. The reforms which are implemented over the past several years will lead to a robust growth over the coming years. India is one of best performing equity markets in 2017 and thus should attract investors interest on account of changing fundamentals, better macro-economic indicators, reform-oriented agenda and rising investor participation

Debt Market Outlook

2017 was a roller-coaster ride for bond yields. Excess liquidity, rising inflation and fiscal slippages kept investors guessing regarding the future trajectory. Currently, with an increase in fiscal deficit target, upside risk to inflation on account of higher MSPs, neutral stance of RBI, tightening of policies by central banks across developed nations, we recommend to reduce the exposure from long duration funds

Best ELSS Funds for tax saving

Equity Linked Savings Scheme (ELSS) are tax saving mutual funds which provide an investor with the tax-saving benefit of up to Rs 1.5 Lakh under section 80 C of the Income Tax Act. An investor may invest more than Rs 1.5 lakh in these schemes but the excess amount over Rs 1.5 lakh will not qualify for any exemption.

·   Tax exemption upto Rs 1.5 lakhs u/s 80C
·   Higher returns compared to other tax saving schemes such as PPF, NSC, tax saver fixed deposit
·   Lock-in of three years against six years and fifteen years in NSC and PPF respectively
·   No guaranteed returns as investments are made in equities thus resulting in higher risk as compared to other tax saving instruments such as PPF, NSC etc.
·   No premature withdrawal is allowed

We, at ORO, have shortlisted top 3 ELSS funds to invest for 2018-19. These funds are picked based on parameters like highest returns over the 3-year and 5-year period, asset under management of more than Rs 500 crore (as it provides confidence to retail investors), and attractive risk-return profile with a beta close to 1 and low standard deviation. Based on our analysis following are the funds an investor should look to invest for 2018-19:

Fund 1 – Birla Sun Life Tax Relief 96 – Direct Plan
Absolute returns (%)
Category (%)
Category rank
Portfolio P/PE
3Y-Portfolio Beta
Top 10 Companies (%)
Portfolio P/B
3Y-R-squared (%)
Top 3 Sectors (%)
3Y-Sharpe Ratio
3Y-Std Deviation (%)
AUM (Rs. Bn)
Source: Value Research; Returns as of Jan 24, 2018; Portfolio information as of December 2017; Category: Equity – Tax Saving
The scheme seeks to generate long-term capital growth by investing over 80% of the portfolio corpus in equities.
The fund is one of the oldest ELSS funds and has been consistently generating alpha over benchmark and category average over the multi-trailing time period. The fund follows a combination of both top-down approach and bottom-up approach while selecting stocks and ensures investment is made only in fundamentally sound stocks that are trading at a discount from its intrinsic value.
The fund follows a multi-cap strategy and has a quarter of portfolio allocation to giant cap stocks followed by 14% and 53% in large-cap and mid-cap stocks respectively. Due to a higher weight in mid-cap segment, the fund struggled to beat its benchmarks and peers in 2010 and 2011. Also, due to re-shuffling of the portfolio in 2006, the fund underwent through some turbulence when Ajay Garg took over. Since then, the fund has remained very stable.
In terms of risk, the fund has a beta of 0.91 and is fairly balanced when it comes to correlation with the market. The fund performance is purely derived from the performance of underlying securities and allocation effect remains low. With the standard deviation of 13.54%, the fund has lower volatility than category thereby making the risk-reward profile attractive. The fund is fairly concentrated with 50 names of which top-10 accounts for more than half of the portfolio corpus.
About the fund manager:
Ajay Garg is the portfolio manager of the fund. With over 15 years of experience in the financial services industry, Garg is known to invest primarily in mid-and small-cap stocks. Ajay is associated with Aditya Birla Sun Life Asset Management Company since 2003 and was associated with Birla Sun Life Securities Ltd prior to that. He holds a BE in electronics and an MBA in finance.

Fund 2 –Franklin India Taxshield – Direct Plan
Absolute returns (%)
Category (%)
Category rank
Portfolio P/PE
3Y-Portfolio Beta
Top 10 Companies (%)
Portfolio P/B
3Y-R-squared (%)
Top 3 Sectors (%)
3Y-Sharpe Ratio
3Y-Std Deviation (%)
AUM (Rs. Cr)
Source: Value Research; Returns as of Jan 24, 2018; Portfolio information as of December 2017; Category: Equity – Tax Saving
The scheme seeks to generate medium-to-long term growth in capital and provides income tax rebate. The fund invests in equities and also takes exposure to money market instruments as well.
The fund is an established fund in the category and has been able to generate consistent alpha over benchmark over multi-trailing time periods. The fund has maintained a large-cap bias amid different market phases that have resulted in the consistency of returns and has also provided the fund with an ability to contain downside risk. The fund has over 62% allocation to giant cap names followed by 17% and 16% in large and mid-cap stocks respectively. The fund sticks to the bottom-up approach stock selection process to include stocks in the portfolio and tends to avoid momentum stocks.
In terms of risk, the fund has a beta of 0.85 and shows more conservative approach in relation to the benchmark. Further, the standard deviation at 12.17% is lower than category average at 14.22%. The fund is fairly concentrated with 58 names and remains fully invested at all times with nearly 10% allocation to cash and cash equivalents.
About the fund manager:
Mr Lakshminath Reddy and Janakiraman Rengaraju are the fund managers for the fund.
Mr Lakshmikanth Reddy is the portfolio manager since May 2016. He has over 21 years of experience and was associated with ICICI Prudential Life Insurance Company Limited as Head of Equities prior to joining Franklin. Before joining ICICI, Reddy took up roles with multiple organizations namely HSBC Capital Markets, ABN Amro Asia Equities, Unit Trust of India and Crompton Greaves. He holds a B.Tech in Mechanical Engineering from Jawaharlal Nehru Technical University, Hyderabad and a Post Graduate Diploma in Management from Indian Institute of Management, Ahmedabad.
Janaki Raman Rengaraju is the portfolio manager since May 2016. He has been in the investment management industry for over 14 years. Prior to joining Franklin Templeton, he was responsible to manage the corpus of Chennai based Indian Syntans Group. He has also worked with UTI Securities.
Mr Rengaraju holds an MBA from Indian Institute of Management, Bangalore and a Bachelor of Engineering from Government College of Technology in Coimbatore. He is a Chartered Financial Analyst (CFA) charter holder.

Fund 3 – DSP BlackRock Tax Saver Fund – Direct Plan
Absolute returns (%)
Category (%)
Category rank
Portfolio P/E
3Y-Portfolio Beta
Top 10 Companies (%)
Portfolio P/B
3Y-R-squared (%)
Top 3 Sectors (%)
3Y-Sharpe Ratio
3Y-Std Deviation (%)
AUM (Rs. Crore)
Source: Value Research; Returns as of Jan 24, 2018; Portfolio information as of December 2017; Category: Equity – Tax Saving
The scheme seeks to generate medium to long-term capital appreciation by investing in a diversified portfolio comprising of equity and equity-related securities. The scheme is aimed at enabling investors' avail of deduction from total income, as permitted under the income tax act.
The fund is a play-it-safe fund which has outperformed its benchmark and peers across multi-trailing time periods. The fund's alpha has been impressive relative to category and benchmark over the years and annualized returns are over and above benchmark by 5-6% when compared to other funds in the category. The fund does not follow any style in particular and thus, is a blended fund comprising of both value and growth stocks. The fund manager though invests across entire market cap spectrum but ensures giant cap stocks account for more than 50% of the portfolio allocation followed by 18% in large-cap and equivalent in small-cap.
On the risk front, the fund has a beta of 1 that ensures the fund manager seeks to manage a balanced portfolio and performance of the portfolio is not carried away with market distress and the returns are purely generated by underlying securities. Also, the standard deviation at 14.52% is fairly in line with the category average of 14.22% thereby making risk-reward profile attractive for the fund. Further, the fund is fairly diversified with 72 stocks and top 10 names account for one-third of the portfolio. Lastly, it is worth mentioning that the fund has seen a change in fund manager in 2015 post that its allocation to large-cap names has been higher. Thus, the past performance might not be the true guide to what to expect in future.
About the fund manager:
Mr. Rohit Singhania is the fund manager for the fund. He is associated with DSP BlackRock since September 2005 as Portfolio Analyst in its Portfolio Management Services division. Prior to joining DSP he was a part of the Institutional Equities Research desk at HDFC Securities Limited and an Equity Analyst at IL&FS Investmart Limited. Singhania received an MMS in Finance from the University of Mumbai and also holds a B.Com. degree.