Dsp Blackrock Ace Fund: A Smart Investment Move?

DSP BlackRock A.C.E. (Analyst's Conviction Equalized) Fund Series 1 is a closed-end diversified equity scheme offered to various individual and retail investor groups. It is a joint venture between DSP Group, an Indian financial firm with over 150 years of experience in the sector, and BlackRock, a US-based company which is arguably the largest investment management firm in the world. The fund is designed to provide investors with capital appreciation, with the secondary objective of generating regular income for dividend option holders. It is suitable for investors who are looking to invest money for at least 3-4 years and are seeking high returns, while also being ready for the possibility of moderate losses.

What is the DSP Blackrock ACE Fund?

The DSP BlackRock A.C.E. (Analyst's Conviction Equalized) Fund Series 1 is a closed-end diversified equity scheme. It is offered to various individual and retail investor groups by DSP BlackRock Investment Managers Ltd. The DSP Group, an Indian financial firm with over 150 years of experience in the sector, and BlackRock, a US-based company which is arguably the largest investment management firm in the world, formed a joint venture. The JV has been operating in India for over two decades and is considered one of India's leading asset management companies.

The DSP BlackRock A.C.E. Fund Series 1 is designed to be a mutual fund scheme that primarily seeks to provide investors with capital appreciation. The secondary objective is the generation of regular income for dividend option holders. The scheme would attempt to achieve these objectives through investments made into equities and equity-based schemes of various companies. The fund has the allowance to invest up to 20% of its net assets in equity derivative schemes if the fund manager spots a suitable opportunity in this segment. However, returns are not guaranteed and the fund's objectives may or may not be achieved.

The DSP BlackRock A.C.E. Fund is geared to provide downside protection when the market hits a low. It hand-picks stocks with the aim to propel your investments. It is structured to give you diversified sector exposure in one of the world's fastest-growing economies. The fund will invest in 45-55 high-conviction stocks across market caps.

The DSP BlackRock A.C.E. Fund is suitable for investors seeking capital appreciation with a long-term investment horizon and investing predominantly in equity and equity-related securities.

What are the tax considerations for investments made in the DSP Blackrock ACE Fund?

The DSP BlackRock A.C.E. Series 1 Fund is classified as a diversified equity mutual fund scheme, meaning it is mainly invested in equities and equity-based securities. As a result, the fund is taxed as per the current rules applicable to equity investments.

At present, equity investments in India are subject to STCG (short-term capital gains) and LTCG (long-term capital gains) tax. STCG rules are applicable to equity investments held for less than a year from the date of unit allotment before being redeemed at a profit. The current STCG rate applicable to equity investments is 15%. However, the DSP BR A.C.E. Fund Series 1 is a closed-end scheme and does not allow redemptions prior to the completion of 1 year. Thus, no STCG can be applied to investments made into this scheme.

LTCG taxation is applicable to equity fund investments if such investments have been held for over 1 year from the date of unit allotment. However, at present, LTCG is nil for equity investments, hence all returns received from DSP BR ACE Series 1 Fund investments are completely tax-free under existing equity taxation rules.

For additional details regarding taxation, investors should check the DSP BlackRock ACE Fund fact sheet, SID and KIM.

What are the key features and statistics of the DSP Blackrock ACE Fund?

The DSP BlackRock A.C.E. (Analyst's Conviction Equalized) Fund Series 1 is a closed-end diversified equity scheme offered to various individual and retail investor groups. It is a joint venture between DSP Group, an Indian financial firm, and BlackRock, a US-based company that is one of the world's largest investment management firms. The fund is designed to provide investors with capital appreciation, with the secondary objective of generating regular income for dividend option holders. The scheme aims to achieve these objectives through investments in equities and equity-based schemes of various companies.

• NFO Period: The fund was offered as a new fund offer (NFO) from November 17 to December 1, 2017. Subscribers during this period received units at the face value of Rs.10.
• Entry Load: There is no entry load for this closed-end equity mutual fund, as per an RBI directive.
• Exit Load: As a closed-end fund, investors cannot redeem their investments until the lock-in period ends. No exit load is applicable after the lock-in period.
• Lock-In Period: The lock-in period is 37 months, counted from the date of unit allotment.
• Minimum Investment Amount: The minimum investment amount during the NFO period is Rs. 1000 for lump-sum investments. The AMC does not currently provide for SIP investments or additional investments.
• Fund Manager: M. Suryanarayanan, a second-level CAIA candidate with a CFA certification and a graduate degree from IIM Ahmedabad.
• Portfolio: The fund has a high-conviction multi-cap portfolio, investing in 45-55 high-conviction stocks across market caps.
• Investment Plans: The fund offers direct and regular plans, with growth and dividend options.

What are the investment plans for the DSP Blackrock ACE Fund?

The DSP BlackRock A.C.E. (Analyst's Conviction Equalized) Fund Series 1 is a closed-end diversified equity scheme. It is designed to be a mutual fund scheme that primarily seeks to provide investors with capital appreciation, with a secondary objective of generating regular income for dividend option holders. The scheme attempts to achieve these objectives through investments made into equities and equity-based schemes of various companies.

The fund will invest in 45-55 high-conviction stocks across market caps, with 94% of the money invested in stocks. It mirrors the NIFTY 500 index for sector allocation, ensuring investments benefit from all economic reforms. The fund also has the allowance to invest up to 20% of its net assets in equity derivative schemes.

The DSP BlackRock A.C.E. Fund features multiple variants in terms of plans and options:

• Direct Plan: Available for investors making their investment online or offline, either directly through the fund house or through select third-party intermediaries. This plan has a lower expense ratio, potentially providing slightly higher overall returns.
• Regular Plan: The most widely available scheme variant. This plan can be availed through various third-party intermediaries and the fund house itself. It has a slightly higher expense ratio, potentially resulting in slightly lower returns than the Direct Plan.
• Growth Option: This option is for investors solely seeking capital appreciation on their investments. Any profits generated are reinvested to make the investor's money grow further.
• Dividend Option: This option can be availed if an investor seeks to generate income while staying invested in the scheme. Dividends can only be declared if the scheme makes a profit that leads to a distributable surplus.

How do I invest in the DSP Blackrock ACE Fund?

The DSP BlackRock A.C.E. (Analyst’s Conviction Equalized) Fund Series 1 is a closed-end diversified equity scheme. It is offered to various individual and retail investor groups by DSP BlackRock Investment Managers Ltd. The DSP BlackRock Investment Managers Ltd. is a joint venture between the DSP Group, an Indian financial firm, and BlackRock, a US-based company which is the largest investment management firm in the world.

The DSP BlackRock A.C.E. Fund Series 1 is designed to be a mutual fund scheme that primarily seeks to provide investors with capital appreciation. The scheme would attempt to achieve these objectives through investments made into equities and equity-based schemes of various companies. The fund also has the allowance to invest up to 20% of its net assets into equity derivative schemes should the fund manager spot a suitable opportunity in the segment. It is important to note that returns are not guaranteed and the fund’s objectives may or may not be achieved.

The DSP BlackRock A.C.E. Series 1 Fund is classified as a diversified equity mutual fund scheme, hence it would mainly be invested in equities and equity-based securities. As a result, the fund would be taxed as per the current rules applicable to equity investments.

• NFO Period: The DSP BlackRock ACE Series 1 Fund was featured as a new fund offer (NFO) from the 17th of November till the 1st of December. Those subscribing during this period received units at the face value of Rs.10.
• Entry Load: There is no entry load applicable to this closed-end equity mutual fund.
• Exit Load: Being a closed-end fund, the investor is not free to redeem their investment until the lock-in period has ended. Additionally, no exit load is applicable to redemptions from the scheme made after the end of the lock-in period.
• Lock-In Period: This scheme has an entry period limited to the NFO period of the scheme from 17th November to 1st December, while the exit from the scheme can be made only after the completion of 1110 days from the date of unit allotment. So in effect, the DSP BR Ace scheme has a lock-in period of 37 months counted from the date of unit allotment.
• Minimum Investment Amounts: For those looking to subscribe for this scheme, the minimum investment amount for lump-sum investments is fixed at Rs. 1000 during the NFO period. Being a closed-end fund, at present, no provision for SIP investments or additional investments has been provided by the AMC managing the fund. In case an investor is seeking to make a larger lump sum investment, amounts that are multiples of Rs. 10 over the minimum of Rs. 1000 are acceptable.

During the NFO period from 17th November to 1st December 2017, investors could enter into the scheme either via the online or the offline route directly through the fund house’s representative offices and CAMS RTA (registered transfer agents) offices located all over India. Alternately, direct and regular plans of the scheme may be purchased through the official DSP BlackRock Mutual Fund AMC website. The office locations can provide investors with the DSP BlackRock ACE Fund application form in paper, while this form is also available online in case the investor wants to go the digital route. Lastly, units of the fund’s regular plan can be availed through various brokers and 3rd party market intermediaries operating across India. It is notable that units of this closed-end scheme cannot be availed by prospective investors through any route once the scheme’s NFO period has ended.

Frequently asked questions