VR Logo

Dark Knight

Deutsche Mutual Fund made its mark in a falling market

The fund's history may be relatively short, but it appears to be long on potential. In its six-year existence, the fund house has maintained a strong focus towards debt funds with some good liquid funds. It was only in 2008 that Deutsche Mutual Fund came out of obscurity on the equity front.

Undoutedly, its performances have impressed, but not at an opportune time. It did well in the bull run but did not dazzle. It actually made its mark in a sliding market and shot to prominence from January onwards.

The most compelling aspect about this fund family has been its resolve to steer clear of the greed to launch funds just to bloat up the asset size, particularly in recent times when equity markets have been firing from all cylinders. The fund family has not shown any signs of impatience to script an overnight success story. Rather, its fund launches seem to be well thought out. Its four equity funds were launched in different years (2003, 2004, 2006, 2007). In 2005, it only launched three fixed tenure plans.

DWS Alpha Equity has been the oldest, launched in January 2003. Though its performance was acceptable, on a relative basis it lagged behind its peers. However, in May 2007, Aniket Inamdar joined the fund house and the funds have seen a sharp improvement in performance.

DWS Alpha Equity and DWS Investment Opportunity both boast of 5-star ratings while the other two are not yet rated. DWS Tax Saving has also been a good performer but has recently fallen harder than its siblings.

This is an AMC that is working from the inside out. Not obsessed with NFOs, over the past few years they have been working on their distribution angle, client servicing and investor communication. They have also focussed on putting processes in place, maintaining checks and balances in their investment process and implementing risk control measures.

While all that is good and we certainly do like the edge that Inamdar gives, questions do arise over the very tight equity team which comprises of just three: a fund manager (Inamdar), an analyst and a dealer. There has been no indication from the AMC that they plan to increase the number on this front. Will just one fund manager and analyst be able to consistently deliver?

The saving grace right now seems to the wide research base that the group boasts of internationally and which the India team can avail of.  Deutsche Asset Management was established in India in 2002. In 2006, they brought in their retail brand DWS Investments. DWS Investments is part of the Deutsche Bank Group and is a leading mutual fund company in Germany.

Explanation of the data tables and graphs