Mumbai, March 04, 2021: DSP Investment Managers Private Limited announced the launch of DSP Floater Fund (the scheme), an open ended debt scheme predominantly investing in sovereign bonds and overnight index swaps (OIS) to help investors better navigate interest rate cycles. The NFO is scheduled to open on March 04, 2021 and will close on March 17, 2021.
DSP Floater Fund is a one of its kind product in the short term category (duration band of 1 to 4 years) with interest rate hedge using paid position in OIS. The Scheme aims to offer relatively stable returns for investors without worrying about changes in interest rate cycles. The Scheme aims to navigate interest rate cycles in an optimal manner, having the potential to gain from fall in interest rates as well as aiming to shield portfolio returns in times of reversal of the interest rate cycle.
The Scheme will allocate a minimum of 65% and a maximum of 100% in floating rate debt securities and have exposure mainly in Sovereign Securities issued by state and central government and OIS for creating synthetic floating rate exposure. The Scheme also proposes to invest up to 35% in fixed rate debt securities including money market instruments.
The Scheme has elements of active and passive fund management, having active management in paid OIS position with the passive roll down strategy in Government Securities and State Development Loans. The Scheme is suitable for investors who seek a low risk alternative to fixed deposits with a minimum holding period of over 1 year and prefer portfolios with no credit risk and high liquidity.
“Roll down funds have been a preferred choice for many investors in the 3 years. DSP launched its own roll down fund – Corporate Bond Fund when rates were high (9%) in 2018. As the interest rate cycle shows signs of reversal, we felt it is a good time to introduce a roll down sovereign (short term) fund with OIS that helps hedge against the interest rate risk. The attempt is to capture the term spread at 5 years but minimise volatility if interest rates rise, says Kalpen Parekh, President, DSP Investment Managers.
About DSP Group
DSP Investment Managers has an over 20-year track record of investment excellence. Today, we have the honour of managing money for over 28 lakh investors from all walks of life: hard-working salaried individuals, high-net-worth individuals, NRIs, small and mid-sized business owners, large private & public corporations, trusts and foreign institutions. We take great pride in knowing that we play a key role in the creation of wealth for all our investors and will always continue to be an organization with a purpose – it is our responsibility to make a real difference to the lives of our investors.
DSP Investment Managers is backed by the 150+ year old DSP Group. Over the past one and a half centuries, the family behind the Group has been very influential in the growth and professionalization of capital markets and money management business in India. DSP Group is currently headed by Mr. Hemendra Kothari.
Our investors’ interests will always remain at the core of our business and we will continue to maintain a relentless focus on doing what’s best for them, as they #InvestForGood.