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Best Mutual Funds SWP returns: Superb performance by DSP BlackRock Top 100 Equity Fund

Mutual Funds

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Mutual Funds article in Advisorkhoj - Best Mutual Funds SWP returns: Superb performance by DSP BlackRock Top 100 Equity Fund
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If you had invested 10 Lacs in the NFO of DSP BlackRock Top 100 Equity Fund – Regular plan - Growth, 13 years back on the launch date of March 03, 2003 and started withdrawing 8,000 per month after one year then the current value of your investment would have been 1.26 Crores even after withdrawing 11.84 Lacs through 148 SWP instalments of 8,000 each in the last 12 + years (Based on June 23, 2016 NAV).

To come to this conclusion we assumed that the lumpsum investment of 10.00 Lacs was made on March 10, 2003, the launch date of the fund. We have also presumed that the monthly Systematic withdrawal of 8,000 was started after one year i.e. on the 15th of every month (starting from March 15, 2004) so that each and every SWP withdrawal amount is treated as tax free!

At Advisorkhoj, we are doing this study to make aware our readers how the SWP works in mutual funds and how it can be a preferred choice of investors who look for regular returns from their lumspum investments.

Please look at the image below to understand how we have selected the different options in the SWP Research Tool to get the results. You can also like to explore our SWP Return Calculator to explore the SWP returns of any fund of your choice.


Mutual Funds - How we have selected the different options in the SWP Research Tool to get the results

Source: Advisorkhoj SWP Calculator – DSP BlackRock Top 100 Equity Fund – Regular - Growth


SWP results of DSP BlackRock Top 100 Equity Fund – Regular plan - Growth

From the above chart you can see that you would have withdrawn a total of Rs. 11.84 Lacs in last 12 + years, through 148 equal monthly SWP instalments of Rs. 8,000 each, thus, you would have got a tax free return of 9.6% every year. Even after withdrawing a tax free amount of Rs. 11.84 Lacs, the current value of your investment of 10.00 Lacs in DSP BlackRock Top 100 Equity Fund – Regular plan - Growth is amazing Rs. 1.26 Crores! Based on NAV of June 23, 2016.

On February 16, 2015, DSP BlackRock Top 100 Equity Fund - Regular Plan - Growth hit the highest NAV of 165.973 (considering all the NAVS on the SWP date of 15th of every month during the SWP period) and the value of your investment on that day was 1.36 Crores! After that you have withdrawn 16 more SWP instalments of 8,000 each and the current value as on June 23, 2016 stands at an amazing 1.26 Crores!

Download the cash flow in excel showing the details of SWP withdrawals, NAVs and values on respective dates Click here

We have analysed similar samples with other Large Cap Equity Funds and found that SWP returns of DSP BlackRock Top 100 Equity Fund - Regular Plan - Growth so far is one of the best amongst its peers and certainly one of the wealth creators amongst large cap equity funds.

About DSP BlackRock Top 100 Equity Fund

DSP BlackRock Top 100 Equity Fund is one of the well known funds in the large cap fund category. Launched on March 10, 2003 by DSP BlackRock Mutual Fund, one of the best known Asset Management Companies in India, the Fund has an AUM of Rs. 3,369 Crores (as on May 31, 2016).

The Fund is being managed by the veteran fund manager, Mr. Harish Zaveri since July 2015. Zaveri was entrusted with the job of managing two flagship funds of DSP BlackRock Mutual Fund – DSP BlackRock Top 100 Fund and DSP BlackRock Equity Fund in July 2015.

DSP BlackRock Top 100 Equity Fund is a fund with long term track record. The fund tries to generate capital appreciation from a portfolio consisting of stocks from top 100 large listed companies in India. DSP BlackRock Top 100 Equity Fund is very bullish on financial sector and has invested 32% of its assets in companies like HDFC Bank, Indusind bank, Kotak Mahindra Bank, Bajaj Finance, Bajaj Finserve and SBI. The other sectors that the fund is bullish are Automobile, Energy, Technology and Healthcare. Infosys, Maruti Suzuki, BPCL and Reliance Industries are some of the biggest holdings of the fund.

Since the performance of DSP BlackRock Top 100 Fund has been challenging over the past few years, the fund ratings have not been very good. It is a Valueresearch 3 Star rated fund. CRISIL has given it Rank 3 in the large cap category as well in the consistent performers – equity funds category

The fund manager is now re-positioning stocks where the growth has been challenging. Zaveri is focusing more on companies, where he sees earnings growth reviving over the next one year or so. The blend of value and growth investing styles will enable DSP BlackRock Top 100 Fund to perform better across different investment time-scales in the times to come.

You might like to read the detailed fund review this large cap mutual fund has made a strong comeback

The 3, 5 and 10 years annualised returns of the fund is impressive at 15.78%, 10.30% and 13.90% respectively (Based on NAV of June 23, 2016). The fund has beaten the Benchmark S&P BSE 100 with a good margin.

Lumpsum returns of DSP BlackRock Top 100 Equity Fund

DSP BlackRock Top 100 Equity Fund – Regular - Growth has given exceedingly well lumpsum returns as well. The current value of investment of 10 Lacs made on the fund launch date of March 10, 2003, is around 1.57 Crores! A CAGR growth of whopping 23% since inception (Based on June 23, 2016 NAV).

If you had invested the same amount in S&P BSE 100 and CNX NIFTY then your current investment value would have been only Rs. 93.00 Lacs and 82.00 Lacs respectively (Based on June 23, 2016 NAV). Therefore, it has beaten the returns of both - the Benchmark of the fund as well as the CNX NIFTY Index by a huge margin.


Mutual Funds - The Benchmark of the fund as well as the CNX NIFTY Index by a huge margin

Source: Advisorkhoj Lumpsum Return Calculator – DSP BlackRock Top 100 Equity Fund – Regular - Growth(Data as on 23/06/16)


Simply speaking your lumpsum investment in DSP BlackRock Top 100 Equity Fund – Regular - Growth has grown by whopping 15.70 times in little more than 13 years!

Please check here Lumpsum Returns of DSP BlackRock Top 100 equity Fund Regular – Growth

To know lumpsum return of any fund, you may like to check our LUMPSUM RETURNS OF MUTUAL FUNDS - CALCULATOR

SIP Returns of DSP BlackRock Top 100 Equity Fund – Regular - Growth

The SIP returns of DSP BlackRock Top 100 Equity Fund – Regular - Growth have also been excellent! If you had started a monthly SIP of 5,000, 13 years back on the launch date of March 10, 2003, you would have accumulated a decent corpus of Rs. 25.18 Lacs as of June 23, 2016 whereas you had invested only 8.00 Lacs through 160 instalments of 5,000 each. During this period the fund has given XIRR return of around 16.00% which is one of the best amongst the peer group of schemes. Check Advisorkhoj SIP RETURN CALCULATOR

Further, if you see the chart below, you will notice that SIP in DSP BlackRock Top 100 Equity Fund – Regular - Growth has also beaten the CNX NIFTY and S&P BSE 100 Index SIP returns with a huge margin.


Mutual Funds - SIP in DSP BlackRock Top 100 Equity Fund – Regular - Growth has also beaten the CNX NIFTY and S&P BSE 100 Index SIP returns with a huge margin

Source: Advisorkhoj SIP Return calculator – DSP BlackRock Top 100 Equity Fund – Regular - Growth


You may try this tool Top Performing SIP Funds to check Top Funds of any category.

What is Systematic Withdrawal Plan

In a Systematic Withdrawal Plan (SWP), you regularly withdraw a fixed amount on a fixed date or dates from a fund. The amount to be withdrawn and the frequency of withdrawal/s are decided by you. You can withdraw a fixed amount, based on your requirement - weekly, fortnightly, monthly, and quarterly or annually - from your investment.

SWP withdrawals from an equity fund, after one year from the date of investment, is totally tax free as it is treated as long term capital gains. It is a good investment option for investors willing to take moderately high risk and looking for regular income from their lumpsum investments while also want to see their investments grow in value.

Try our SWP RETURN CALCULATOR to know SWP returns of your favourite funds.

Conclusion

DSP BlackRock Top 100 Equity Fund has given excellent SWP returns since inception and may be a good choice for investors looking for regular income from their lumpsum investible surplus. The lumpsum and SIP returns of DSP BlackRock Top 100 Equity Fund have also been very good and it has proved to be one of the wealth creating schemes for the investors who remain invested with the fund for long. Needless to mention it has also beaten the Benchmark S&P BSE 100 and CNX NIFTY with huge margin.

The since launch annualised return of 23% + certainly makes it the fund of choice for the retail investors in India!

The performance of the fund has not been that great in the last few years but the blend of value and growth investing styles will enable DSP BlackRock Top 100 Fund to perform better across different investment time-scales in the future. However it is advisable that, investors should have long investment horizon, when investing in DSP BlackRock Top 100 Fund to get the best results.

Investors should also note that past performance of mutual funds is no guarantee for future returns. Mutual fund investments are also subject to market risk and therefore investors must consult their financial advisors and check if investment in DSP BlackRock Top 100 Equity Fund is suited for their investment needs based on their risk profile.

If not sure about your risk profile, you may like to Try this

Those readers interested in knowing more about SWP, should read the following –

Mutual Funds are ideal investment option for retirement planning

Mutual Fund systematic withdrawal plans are smart option for income needs

Related SWP articles –

Reliance Equity opportunities Fund, Birla Sun Life Frontline Equity Fund, ICICI Prudential Dynamic Fund, SBI Magnum Global fund, Sundaram Select Midcap Fund and ICICI Prudential Value Discovery Fund

Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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Pradip Chakrabarty

Pradip is a first generation entrepreneur who has built a very successful business for distribution of financial products over last 19 yrs. He is also the Founder and CEO of www.advisorkhoj.com. Pradip is well respected in the Financial Services industry and brings deep domain knowledge and leadership skills and is considered as one of the top Investment Advisors in India. He can be contacted at pradip@advisorkhoj.com

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