The usual metaphor for the Indian economy is an elephant— big in size, but slow. The South East Asian economies on the other hand have usually been referred to as 'Tigers', due to their rapid economic growth. DSPML Mutual Fund thinks that India is also on the verge of rapid economic expansion and so the Tiger metaphor is relevant here too. In order to capture this flavour of rapid economic growth, the fund is launching a diversified equity scheme, called the TIGER Fund. This TIGER is an acronym for The Infrastructure Growth and Economic Reforms Fund.
As the name suggests the fund will focus on companies that will benefit from structural changes brought about by continuing liberalisation in economic policies by the government. Investments in infrastructure, both by the public and private sector are also reasons for optimism and the fund will thus focus on this area too.
Specifically DSPML Mutual Fund sees many positive developments in different sectors of the economy. In its view the Electricity Act 2003, the accelerated Power Development Reform Programme and the Securitisation Act should radically transform the electricity and banking sectors respectively. Similarly deregulation in oil and gas, introduction of product patents and conditional access system should unleash the potential in the petroleum, pharmaceuticals and media sectors.
In order to tap these positive developments, within the theme of overall economic reforms, the TIGER Fund will invest in infrastructure sectors, banking and finance, media, fertilisers, PSU disinvestment and pharmaceuticals among others. The asset management company has also indicated that information technology and FMCG are the sectors on which there will be a lesser focus at present. In terms of DSPML's existing diversified equity products, the fund will be at the top end of the risk-return spectrum. The fund will thus have a higher risk-return potential that both the DSPML Equity as well as DSPML Opportunities Fund. Since it is more diversified than a sector fund, it will be lower risk than say a technology or an FMCG fund.
Along with this scheme, the AMC is adding an aggressive and conservative option to its fund DSPML Savings Plus. DSPML Savings Plus is a debt oriented hybrid fund, which can have an equity exposure of upto 20 per cent. In order to supplement this allocation, the fund is providing for enhanced equity exposure of upto 30 per cent through the aggressive option and upto 10 per cent through the conservative option. The current DSPML Savings Plus is also being renamed as DSPML Savings Plus and will continue with its equity exposure of upto 20 per cent.