DSP BlackRock Dynamic Asset Allocation Fund-Who can invest?

We all know that equity investment is for long term and we also know that this asset class will give best return when we stay invested for long term. But who will teach you when to enter and exit perfectly? Answer is DSP BlackRock Dynamic Asset Allocation Fund.

For common investors one of the big headache is sitting on too much information.  In our daily life we find below suggestions from the so called experts. But you will feel scary whether to go ahead or wait and watch. Below are the few confusions which everyone will face.

1) Buy now as market is down-But you feel scary thinking that what if market still go down.

2) Whether to invest in equity or debt for our financial goals.

3) What will be future interest rate trend and whether it is right time to enter debt funds now?

4) Can we wait till General Election over?

5) I think we can’t understand equity and debt funds. So can we invest in Gold now?

So the major questions to today’s all investors are-When, Where and How much. To make your life simplify with equity investment, DSPBR come up with new concept called investing in a Dynamic way using the Yield Gap theory. So what is Yield Gap theory all about? Hope this below presentation will simplify it in a better way.

Timing the market at each time is not an easy task. It requires some qualified approach towards investment which normal investor can’t do himself. Also one need a perfect portfolio asset allocation to get a success in your investment. Below is the image which will simply your way of understanding of how this fund actually work.

DSP BlackRock Dynamic Asset Allocation Fund-1

DSPBR Mutual Fund conducted some research like how this work out by collecting the data from Nov 2000 to Dec 2013 and according to them this concept worked wonders and the same was shown in below image.

DSP BlackRock Dynamic Asset Allocation Fund-2

Now let us see how the fund allocation was done for the above said period using this method.

DSP BlackRock Dynamic Asset Allocation Fund-3

This is the NFO open ended fund and will be available for investors for subscription from 17th Jan 2014.

So this validates that concept of Yield Gap will actually work wonderfully. But there are few drawback to this fund which you need to understand before proceeding further.

1) Underlying funds for this Fund of Fund are

  • DSPBR Equity Fund (for equity).
  • DSPBR Top 100 Equity Fund (for equity).
  • DSPBR Strategic Bond Fund (for fixed income).
  • DSPBR Short Term Fund (for fixed income).

All the four funds are currently 3 star rated by valueresearchonline.com.  These are funds are not such big performer when you compare their peers.

2) This fund being Fund of Fund, expenses of this fund will be higher. Because you need to bear the cost of this fund as well as underlying four funds.

3) This fund is treated as debt fund. Hence this fund not a tax efficient fund compare to pure equity funds.

4) Continues churning of portfolio means additional cost on the fund.

5) Concept is new and difficult to understand the novice investors.

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Comments

  1. Sameer says

    If I am intending to invest with a horizon of 2-3 years, would this fund be beneficial to invest over such short time horizon? How would you suggest?

  2. says

    i wish to seek your advice on longterm capital gain tax on sale of house property, if payments are split across two financial years.
    for eg : receipt of 50% advance payment in current year and the rest in mid june after registration of property.

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