Mumbai: DSP BlackRock Mutual Fund today announced the launch of open ended equity growth fund, DSP BlackRock Focus 25 Fund.
The fund invests largely amongst the top 200 companies by market capitalisation. The portfolio will limit exposure to companies beyond the top 200 companies by market capitalisation to 20 per cent of the net asset value.
"The Scheme will normally hold equity and equity-related securities including equity derivatives, of upto 25 companies,"aid in a press release.
DSP BlackRock said the scheme will have a concentrated portfolio adopting a highly flexible investment approach. Concentrated portfolios are often the result when managers seek to sharpen the focus with regard to stock selection and therefore stock weightage in the portfolio.
The company said the rationale for launching a fund with this strategy was due to the fact that the market has risen significantly over the last one year, with a significant performance divergence not only among sectors but also amongst stocks within these sectors highlighting the need, apart from sector selection, for stock selection.
IT said, "A significant percentage of risk paring on account of diversification can be achieved with relatively fewer stocks, provided they are not of a similar type. While adding more stocks increases the degree of diversification, the ability of the scheme to generate relatively higher returns recedes as the number of stocks in the portfolio increases."
This fund will appeal to investors who seek a concentrated equity portfolio and is benchmarked against the BSE Sensex. It offers options of growth and dividend reinvest dividend.
The minnimum investment amount is Rs5,000 and multiples of Re1- thereafter.