#INVESTFORGOOD

DSP Flexi Cap Fund (erstwhile DSP Equity Fund)

[Title to come]
[Sub-Title to come]

| People | Processes | Performance |

June 2021

Date Strictly for Intended Recipients Only

* DSP India Fund is the Company incorporated in Mauritius, under which ILSF is the corresponding share class
What is DSP Flexi Cap Fund?

INVESTS ACROSS THE

MKT. CAP SPECTRUM
WITHOUT ANY LIMIT
~ 2/3rd in large caps
~ 1/3rd in mid & small
caps
CORE + TACTICAL
APPROACH INVESTMENT
Core portfolio based on PHILOSOPHY
long term themes Buy quality
FLEXI CAP
Core Equity Portfolio : ~ businesses
75%-80% FUND Stay invested
Tactical Equity Portfolio Use corrections to
: ~ 20%-25% average down
No. of stock: ~ 50-70

FRAMEWORK TO
IDENTIFY COMPANIES
Business Strength
Management Quality
Growth prospects

Flexi Cap fund aims at investing in quality businesses with good growth prospects

Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards. The strategy/investment approach 2
mention above currently followed by the Scheme and the same may change in future depending on market conditions and other factors.
Why invest in the DSP Flexi Cap Fund?

ONE STOP OPTION FOR EQUITY

INVESTMENTS

Seeks opportunities
across the market
LONG TERM EQUITY No need for investor to CLEAR ROLE IN OVERALL
INVESTMENTS decide on large/ ASSET ALLOCATION
mid/small cap allocation
Documented investment
Owns high quality
framework gives clarity
companies with good
on what to expect
growth prospects.
Easy to fit into overall
Buys and holds for the
asset allocation plan of
long term
the investor

CORE EQUITY
PORTFOLIO
ALLOCATION

Suitable for the core long term equity allocation in an investment portfolio

3
Investment Philosophy

STOCK SELECTION PORTFOLIO CONSTRUCTION REVIEW & REBALANCING

Tactical Competitive
Growth Business portfolio positioning of quality
businesses
Core Stock
portfolio prices

Management

Framework for identifying Core portfolio of quality businesses Use market corrections to add to
quality businesses based on long term themes quality business at lower prices

Buy quality businesses, stay invested and use market corrections to average down costs

4
Investment Framework (Business – Management – Growth)

Scale advantages create

a virtuous cycle
Market share
dominance
Vast market, small size,
hunger for growth &
calculated risk – taking
BUSINESS Gaining market share
Growth
via rapid growth

Healthy ROEs &

growth
Low capex
intensity
Management
High cash conversion
Funding via internal accruals
Relentless focus on
cost and cash flow
The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research offsets challenges
report/recommendation of the same and the portfolio may or may not have any
current or future position in these sector(s)/stock(s)/issuer(s). Low cost structure
Not requiring equity dilution

1st of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Business

Source: Internal. 5
Investment Framework (Business – Management – Growth)

Capital allocation
directly influences
growth
Capital allocation
Focus on core business
MANAGE - Unrelated
Business diversification can
Model MENT destroy value

Long term orientation over

Growth opportunistic short term-ism
Short term opportunism
can unravel in a
downturn

The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research report/recommendation of

the same and the Portfolio may or may not have any current or future position in these
sector(s)/stock(s)/issuer(s).

2nd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Management

Source: Internal. 6
Investment Framework (Business – Management – Growth)

Converting potential
opportunity into a real
business
Competency and
Perseverance
Manage - GROWTH
ment

Long term compounding

without equity dilution

Business Model Superior growth rates

Market cap growth largely

tracks earnings growth

The sector(s)/stock(s)/issuer(s) mentioned do not constitute any research report/recommendation of the

same and the Portfolio may or may not have any current or future position in these
sector(s)/stock(s)/issuer(s).

3rd of 3 pillars of DSP Flexi Cap Fund’s equity investment framework – Growth

Source: Internal. 7
Investment Framework - Portfolio construction

EQUITY PORTFOLIO COMPOSITION

CORE ~ 75 – 80% in
DETERMINE Aspirational structural themes
country like India ALLOCATION
LONG TERM ~ 20-25% in
dependent on TO
STRUCTURAL per capita tactical ideas
STRUCTURAL
income growth with turnaround
THEMES THEMES triggers

EQUITY PORTFOLIO DIVERSIFICATION

Diversified
DIVERSIFY MAINTAIN portfolio
No. of stocks=>
STOCK ~ 50-70 MARKET CAP ~ 60-70% large
Control portfolio cap stocks
WEIGHTS IN BALANCE IN
volatility ~ 30-40% Mid &
PORTFOLIO PORTFOLIO Small stocks

Seeking to capture long term growth prospects while managing risks

Source: Internal. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards. 8
Investment team

FUND MANAGER
Atul Bhole – Managing fund since June 2016 Abhishekh Ghosh– Managing the fund
• Atul is also the co-Fund Manager for the DSP Equity & Bond
since 01 Jan 2021
fund and the DSP Dynamic Asset Allocation Fund. • Over 13 year experience in equity
• Atul has over 14 year of experience in fund management research
and equity research with Fund management experience
since 2011 • Joined DSPIM in Sep 2018 as midcap
analyst. Prior experience of working
• Joined DSP Mutual Fund in May 2016 as VP – Investments. with Motilal Oswal in their institutional
Previous work experience with Tata Asset Management
equities division
(Feb 07 – Apr 16), JP Morgan & SBI treasury
• Masters in Mgmt. Studies from JBIMS and has cleared his • Masters in Management Studies from N
CA exam L Dalmia Institute and has graduation in
Electronic Engineering.

TEAM SUPPORTING THE FUND MANAGER

Resham Jain, CFA (14)

Charanjit Singh (12) Abhishek Rathi (13)
Chinmay Sapre (9) VP, Small & Mid Caps, Agri
AVP, Capital Goods, AVP, Financials &
AVP, Aviation, Realty inputs, Textiles, Chemicals,
Infra, Power Utilities, Industrials for Long / Retail
Consumer Durables Short

Kaushal Maroo (11) Dhaval Gada (10) Chirag Dagli (19) Suryanarayanan
AVP, Autos, Ancillaries, AVP, Banking and VP, Healthcare Manian, CFA (10)
Cement Financial Services VP, Tech, Telecom,
Media, FMCG

Aayush Ganeriwala (2) Bhavin Gandhi (15)

Abhishek Singh (14) AVP, Portfolio Manager Nilesh Aiya (12)
Senior manager, Oil &
AVP, Portfolio Manager AVP, Forensic Research
Gas, Metals

Experienced investment team with a wide coverage of Indian equity markets

Years in brackets ( ) is years of experience. 9
 Performance Scorecard

ROLLING RETURNS
1 YEAR ROLLING RETURNS (%) 3 YEARS ROLLING RETURNS(%) 5 YEARS ROLLING RETURNS (%) 10 YEARS ROLLING RETURNS (%)
DSP Flexi Cap DSP Flexi Cap DSP Flexi Cap DSP Flexi Cap
Nifty 500 TRI Nifty 500 TRI Nifty 500 TRI Nifty 500 TRI
Fund Fund Fund Fund
Average Annual Returns 24.5 19.2 19.5 15.5 19.9 15.9 20.0 15.6

Median Annual Returns 15.6 12.8 15.1 12.5 16.0 14.0 20.2 16.1

Minimum Annual Returns -54.0 -59.5 -26.9 -21.7 0.9 -1.5 7.2 5.0

Maximum Annual Returns 154.1 154.3 85.3 69.4 64.5 51.3 33.4 26.5

Returns / Risk 1.11 0.82 0.89 0.66 0.91 0.68 0.91 0.67

POINT-TO-POINT RETURNS

TIME PERIOD DSP Flexi Cap Fund Nifty 500 TRI ALPHA
1 year 60.3 60.8 -0.5
3 years 18.1 15.0 3.1
5 years 16.9 15.4 1.5
10 years 13.8 12.8 1.0
Since Inception 19.7 14.9 4.8

Source: MFIE; Rolling Returns are since inception till Jun 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option. Standard Deviation
of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes managed by same Fund Manager. Past
performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for performance of the index should not construe as
returns/performance of the Scheme. It is not possible to invest directly in an index.

DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods

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Performance Scorecard

AVERAGE ROLLING RETURNS

30.0
24.5
25.0
19.2 19.5 19.9 20.0
20.0
15.5 15.9 15.6
15.0

10.0

5.0

0.0
1 yr RR 3 yr RR 5 yr RR 10 yr RR

DSP Flexi Cap Fund Nifty 500 TRI

RETURN PER UNIT OF RISK

1.20 1.11

1.00 0.89 0.91 0.91

0.82
0.80 0.66 0.68 0.67
0.60

0.40

0.20

0.00
1 yr RR 3 yr RR 5 yr RR 10 yr RR

DSP Flexi Cap Fund Nifty 500 TRI

DSP Flexi Cap Fund aims to provide better risk adjusted returns profile across periods
Source: MFIE; Rolling Returns are since inception till Jun 30, 2021. Returns provided above are of DSP Flexi Cap Fund – Regular Plan, Income Distribution cum capital withdrawal option.
Standard Deviation of DSP Flexi Cap Fund and Nifty 500 TRI is calculated on the basis of daily returns. Click here for scheme performance in SEBI prescribed format and of other schemes
managed by same Fund Manager. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The figure mentioned for
performance of the index should not construe as returns/performance of the Scheme. It is not possible to invest directly in an index.
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 Portfolio details – sector exposures

Sectors Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21

Energy 10.1% 7.2% 6.8% 4.6% 1.0% 3.1% 3.1% 0.6%

Materials 12.8% 13.0% 14.6% 15.6% 11.9% 11.3% 10.3% 11.5% 16.8% 15.8% 15.9%

Industrials 10.0% 18.9% 17.6% 16.6% 15.9% 13.6% 10.4% 7.4% 6.2% 7.1% 8.4%

Consumer Discretionary 14.3% 10.8% 11.3% 12.6% 15.0% 12.1% 9.4% 10.4% 10.0% 7.8% 12.2%

Consumer Staples 4.9% 5.7% 7.4% 4.7% 7.3% 8.2% 10.2% 7.7% 6.8% 5.8% 6.0%

Healthcare 7.6% 6.7% 2.1% 4.1% 6.4% 7.2% 6.9% 7.7% 6.4% 6.7% 6.4%

Financials 25.3% 25.5% 31.8% 27.9% 32.0% 34.3% 40.4% 41.1% 34.0% 34.8% 36.4%

Information Technology 8.5% 5.6% 3.6% 3.8% 7.4% 8.2% 8.7% 4.4% 4.8% 9.7% 7.4%

Communication Services 1.2% 2.7% 6.1% 3.2% 1.1%

Utilities 2.9% 5.0% 3.7% 4.9% 1.2% 0.8% 1.0% 3.3% 3.9% 4.2%

Real Estate 2.2% 2.1% 1.7% 0.9%

Total Equity 96.4% 98.3% 98.8% 96.1% 98.0% 95.7% 97.3% 98.2% 96.5% 99.5% 99.4%

Significant exposure in Financials, Materials and Consumer discretionary sector during Atul’s tenure
Source: Morningstar; GICS Classification has been considered for sectoral break-up. Portfolio data as on Jun 30 2021. The sector(s)/stock(s)/issuer(s) mentioned in this note do not
constitute any recommendation of the same and the Fund may or may not have any future position in these sector(s)/stock(s)/issuer | More than 10% allocation highlighted in Orange
and more than 5% allocation highlighted in grey
12
 Portfolio details – concentration and market cap trends

SECTOR CONCENTRATION TRENDS STOCK CONCENTRATION TRENDS

90% 55% 70
62
80%
80% 50% 65
64% 45% 60
70% 40% 55
60% 35%
30% 40% 50
50% 36% 45
25%
40% 20% 40
26%
30% 15% 35
10% 30
20%

Jun-16

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21
Mar-18

Dec-19
Sep-16
Dec-16
Mar-17

Sep-17
Dec-17

Sep-18
Dec-18
Mar-19

Sep-19

Mar-20

Sep-20
Dec-20
Mar-21
Jun-16

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21
Mar-17
Sep-16
Dec-16

Sep-17
Dec-17
Mar-18

Sep-18
Dec-18
Mar-19

Sep-19
Dec-19
Mar-20

Sep-20
Dec-20
Mar-21
Top 5 stocks (LHS) Top 10 stocks (LHS) Total No of stocks
Top Sector Top 3 Sector Top 5 Sector

MARKET CAP BREAK UP

100%
90%
12%
80% 25% • Market cap tilt towards large cap.
70% • Increase in Mid/small cap exposure recently
60%
50%
40% 63%
30%
20%
10%
0%
Jun-16

Jun-17

Jun-18

Jun-19

Jun-20

Jun-21
Mar-19
Sep-16
Dec-16
Mar-17

Sep-17
Dec-17
Mar-18

Sep-18
Dec-18

Sep-19
Dec-19
Mar-20

Sep-20
Dec-20
Mar-21

Large Cap Mid Cap Small Cap

Significant increase in stock & sector concentration during Atul’s tenure

Source: MFIE; Portfolio data as on Jun 30, 2021. The sector(s)/stock(s)/issuer(s) mentioned in this note do not constitute any recommendation of the same and the Fund may or may not
have any future position in these sector(s)/stock(s)/issuer. Large-caps are defined as top 100 stocks on market capitalization, mid-caps as 101-250 stocks, small-caps 251 stock onwards.
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 Top Holdings as on June 30, 2021
Core Portfolio Holding, Tactical Portfolio Holding

APPLYING THE INVESTMENT FRAMEWORK IN STOCK SELECTION & PORTFOLIO CONSTRUCTION

PORTFOLIO
TOP 5 STOCKS BUSINESS MANAGEMENT GROWTH COMMENTS
WEIGHT (%)
 Right mix of retail & corporate  Advances growth expected to be
 Core banking business
ICICI BANK loan  Focused on profitable better than industry average
8.05 attractively valued with
LIMITED  Strong franchise in terms of growth with granularity  Possibility of strong earnings
probability of rerating
branch network & technology growth for next 2 years
 Steady compounding of
 Strong process driven  Focused on consistent  Advances growth expected to be
earnings can provide
HDFC BANK organization profitable growth better than industry average
6.65 comfort
LIMITED  Optimal mix of profitable retail  Prudent in credit quality  Possibility of strong earnings
 Franchise continues to
segment and ALM management growth for next 2 years
strengthen

 New management’s  Investments in & flexibility to  Co has made a comeback

 Strong business model, shifting
growth strategies playing front sales team started to yield with leadership changes &
from just labor arbitrage to
INFOSYS out results with many large deal wins resultant sharper focus on
4.26 partner providing solutions
LIMITTED  Continuity of culture,  Currently have industry leading front end
 Ability to re-orient, re-train
values despite growth with strong profitability &  Co is now back to industry
towards new technologies
management changes return parameters leading growth

 Cement demand growing at ~ 3-

 Currently largest cement player
in India with pan- India presence
ULTRATECH
 Better mix with higher exposure
CEMENT 3.55
towards north, west & central
LIMITTED
 Continued capacity addition
 Significant cash flow generation
 Successfully built largest
Co in India through pulling
off strategic acquisitions
 Timely & controlled use of
debt to expand
 Strong growth can provide
6%, Co growing faster than
operating leverage & cost
industry & improving market
saving driving profitability
share
 Significant cash generation
 Pricing power & cost savings can
& deleveraging can add to
provide much better profitability
the equity returns
growth & cash generation

 Spread across 20 sub verticals  Strong execution

 Compounding of earnings
 First mover advantage from capabilities  AUM growth of > 40% in last 3
BAJAJ justifies current valuation
huge investments in technology  Product launches at years
FINANCE 3.33  Only finance co having
& analytics regular intervals  Growth Possibility @ 25% given
LIMITED ability to convert to be a
 Opportunity in retail credit  Prudent in credit quality the opportunity size
fintech co with profitability
market and ALM management

Investment framework is the key driver for building portfolio positions

Source: Internal. Past performance may or may not sustain in future and should not be used as a basis for comparison with other investments. The sector(s)/stock(s)/issuer(s) mentioned in this
presentation do not constitute any research report/recommendation of the same and may or may not have any future position in these sector(s)/stock(s)/issuer(s).

14
Current investment outlook and portfolio positioning

Earnings growth expectations

Strong earning growth outlook for next 2
years with low base, pent-up demand &
MARKET OUTLOOK commodity inflation.
Earnings doubling in 4-5 years from FY20 PORTFOLIO POSITIONING
levels.

Market Valuations Valuation expectations

Nifty is trading at 21x FY22 Valuation premium could sustain for
factoring in sharp recovery on quality businesses with strong
FY21. recovery, strengthened businesses
However, it has to be looked and easy liquidity conditions.
with the perspective of changed ~ 20-25%
More Co to benefit from growth- ~ 75-80%
composition of index over past allocation to
inflation dynamics and can be allocation to
12-18 months and global TACTICAL
rewarded by market. CORE portfolio
liquidity. portfolio

Global Scenario
Strong recovery & reflation KEY SECTORS
expectations for 2021 for global
Financials
economy
KEY RISKS Asset prices may continue to spike up, Materials
which may cause bigger drawdowns Healthcare
on any negative event
Consumer
Fiscal Situation Credit issues Discretionary
Indian Government fiscal situation Credit quality has worsened due to
worsened but relatively fine vs. Covid-19, but banks have largely
many other countries. provided for it.
Can improve going forward due to
Possibility of pick-up in credit growth
growth inflation dynamics.
next year can soothe the issues
further.
Positioning the portfolio to capture an economic recovery

Source: Internal.

15
Background & Rationale for reclassifying DSP Equity Fund
[Title
from to come]
Multicap to Flexi Cap category
[Sub-Title to come]

Date Strictly for Intended Recipients Only

* DSP India Fund is the Company incorporated in Mauritius, under which ILSF is the corresponding share class
Background on need to reclassify category – SEBI circulars

SEBI CIRCULARS
Oct 06, 2017
Based on SEBI circular on Categorization and Rationalization of Mutual Fund Schemes, DSP Equity Fund was categorized under Multi cap
category having flexibility to invest across Large cap, Mid cap & small cap companies without any limits.

Sep 11,2020
However, in order to keep Multi cap category true to its label, SEBI came out with circular on Asset Allocation of Multi Cap Funds
providing minimum allocation limits. Accordingly, Multi cap fund will need to have atleast 75% in equity & equity related securities with
following minimum limits
• Large Cap companies – Atleast 25% holding
• Mid Cap companies – Atleast 25% holding
• Small Cap companies – Atleast 25% holding

Nov 06,2020
- SEBI introduced a new category “Flexi Cap” which provides flexibility to Fund manager to decide allocation to Large, Mid & small cap
companies without any sub-limits.
- SEBI has also provided option to convert existing scheme into flexi cap category and accordingly scheme name should reflect the
category

IMPACT OF SEBI CIRCULAR ON DSP EQUITY FUND

As evident from the mandatory SEBI circulars above, DSP Equity Fund had 2 options

1. Continue under Multi cap category and comply with SEBI circular dated Sep 11, 2020 by making requisite changes to the
portfolio to adhere to the allocation limit & various other regulatory requirements
2. Change classification to Flexi cap category by changing name to DSP Flexi Cap Fund without having to make any changes to
the portfolio

DSP proceeded with Option 2 and changed classification of DSP Equity Fund to Flexi cap category.
(Rationale for change is explained in subsequent slide)
17
Rationale for going with Flexi cap category instead of Multicap category

Consistency in fund management style over the years

 DSP Equity fund over its past 23 years history has always been managed as flexi cap without any limit on
market capitalisation
 In order to keep fund management style consistent over the years and make past performance comparable,
it became important to classify the fund to Flexi cap category having no allocation limits

Market capitalisation over the years

100%

90%

80%

70% DSP Equity fund has dynamically

managed allocation to large, mid
60%
& small cap over the years
50% without any limit. Flexi cap
category will allow the fund to be
40%
managed in the same way going
30% forward as well
20%

10%

0%
2011

2014
2003
2003
2004
2005
2005
2006
2007
2007
2008
2009
2009
2010

2011
2012
2013
2013

2015
2015
2016
2017
2017
2018
2019
2019
2020

Large Cap Mid Cap Small Cap

Source – Morningstar; Data as on 31 Dec 2020

18
Disclaimer & Product Labeling Details
In this material DSP Investment Managers Private Limited (the AMC) has used information that is publicly available, including information developed in-house. Information gathered
and used in this material is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and / or completeness of any information. The
data/statistics are given to explain general market trends in the securities market, it should not be construed as any research report/research recommendation. We have included
statements / opinions / recommendations in this document, which contain words, or phrases such as “will”, “expect”, “should”, “believe” and similar expressions or variations of such
expressions that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated
with our expectations with respect to, but not to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on
our services and / or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or
other rates or prices etc. The sector(s)/stock(s)/issuer(s) mentioned in this presentation do not constitute any research report/recommendation of the same and may or may not
have any future position in these sector(s)/stock(s)/issuer(s). The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document of the
scheme. Please refer to the SID for investment pattern, strategy and risk factors. Past performance may or may not sustain in future and should not be used as a basis for
comparison with other investments. All figures and other data given in this document are as on Jun 30, 2021 (unless otherwise specified) and the same may or may not be relevant in
future and the same should not be considered as solicitation/ recommendation/guarantee of future investments by the AMC or its affiliates. Investors are advised to consult their own
legal, tax and financial advisors to determine possible tax, legal and other financial implication or consequence of subscribing to the units of DSP Mutual Fund. For scheme specific
risk factors and more details, please read the Scheme Information Document, Statement of Additional Information and Key Information Memorandum of respective Scheme
available on ISC of AMC and also available on www.dspim.com. For Index disclaimer click here

The strategy mentioned has been currently followed by the Scheme and the same may change in future depending on market conditions and other factors. Large-caps are defined as top 100 stocks on
market capitalization, mid-caps as 101-250 , small-caps as 251 and above.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Scheme Product Suitability Riskometer

This Open ended equity scheme is suitable for

DSP Flexi Cap Fund
investors who are seeking*
(Flexi Cap Fund - An open ended dynamic
Long-term capital growth
equity scheme investing across large cap,
Investment in equity and equity-related securities to
mid cap, small cap stocks)
form a diversified portfolio

*Investors should consult their financial advisors if in doubt about whether the Scheme is suitable for them.

19
 #INVESTFORGOOD

For Professional Investor use only

13