New Delhi : DSP Investment Managers announced the launch of India’s first SIP focused NFO for DSP Global Innovation Fund of Fund (DSP GIF). DSP GIF is a Fund of Funds (it will itself invest in different international funds) which focuses on innovation as its key driver and identifies companies that have innovative thinking at their core, are likely to remain relevant and have the potential to succeed in the long term. These include emerging innovation themes like Metaverse, Semiconductors, Blockchain, 5G, Gene Technology, Artificial Intelligence, Space Exploration, Electric Vehicles & Robotics, among others. Currently, there are very limited opportunities in the Indian listed space to participate in these emerging sectors.

Indian investors have matured & adopted SIPs as the right way of long-term investing. They invest around Rs 12,000 crore every month as SIPs. Another emerging trend is diversifying globally to take advantage of innovative companies that are not present in India. However, SIP flows in global Fund of Funds are just around Rs 200 crore out of the entire Rs 12,000 crore every month.

DSP GIF looks for companies that fall within the three categories: leading Dominators, young Disruptors and connecting Enablers. ‘Dominators’ in their space, such as Amazon, Tesla, Apple1 are those who lead in terms of market cap, market share & revenue and have delivered above-par returns to their investors. ‘Young Disruptors’ are innovative companies with the ability & foresight to become the next ‘Dominators’. Identifying and investing in these early-stage companies that have the chance of becoming the next Apple/ Google/ Tesla is a key theme of this fund.  ‘Enablers’ help the dominators & disruptors scale further & faster by providing connecting products like semiconductors or services such as programming/ development, that are best-in-class.

DSP Global Innovation Fund of Fund will begin by investing in two passive funds, iShares PHLX Semiconductor ETF & iShares NASDAQ 100 UCITS ETF as advised by the industry regulator, SEBI. Once the overseas investment limit for the Indian MF industry (US $7 billion) is enhanced, this fund also propose to invest in unique active strategies like BlueBox Global Technology Fund, Nikko AM ARK Disruptive Innovation Fund, Morgan Stanley US Insight Fund & BGF World Technology Fund and other overseas fund with Innovation theme.3 These funds will look to provide a good balance between disruptive innovators and well-established, innovative dominators.

The New Fund Offer for DSP GIF opens on January 24th 2022, and closes on February 7th 2022.

“Dominant companies and enablers today have seen significant price appreciation due to their growing profits post Covid. On the other hand, the disruptive innovation space is seeing sharp price corrections after running up too fast. Innovation is profitable in the long term & volatile in the short term. We are at the cusp of such volatility in this space & hence we want to recommend the fund via a SIP Focussed NFO, thus helping our investors take advantage of price fluctuations yet building a long-term portfolio of innovation led companies, that may otherwise not be available in India. SIP is now a time-tested way of investing for young Indians & they are gradually embracing global funds to add diversification to their fund portfolios. Via our new fund, we wish to make our investors invest in best-in-class global companies in a disciplined, staggered manner. Evidence over the last 20 years shows that SIP returns are also likely to be better than Lumpsum returns over the long-term.” says Kalpen Parekh, MD & CEO, DSP Investment Managers.

1. The sector(s)/stock(s)/issuer(s) mentioned in this document do not constitute any recommendation of the same and the scheme(s)/ Fund may or may not have any future position in these sector(s)/stock(s)/issuer(s).
2. SIP is the recommended mode to invest in the Scheme during NFO. However, the Scheme also accepts lumpsum and other systematic investments during NFO period. Please refer SID for further details.
3. SEBI has specified an industry level limit of US $7 billion for Mutual Funds (MFs) to invest in overseas securities and mutual funds, and a separate limit of US $1 billion for investment in overseas Exchange Traded Funds (ETFs). While the overseas ETF limit is still some distance away, other international strategies have seen healthy flows and the limit of US $7 billion for investments in overseas securities/mutual funds could get exhausted soon. Therefore, on 23rd January 2022, SEBI advised that DSP Global Innovation Fund of Fund should initially invest only in overseas ETFs until the limit of US $7 billion is increased in consultation with the RBI.