Presentation on DSP Merril Lynch Mutual Fund

DSP Merril Lynch Bond FundDSP Merril Lynch Equity Fund

By : Kapil MakkarRoll No. 913

Contents

1. Objective2. Introduction of Fund House 3. Analysis of DSP Merril Lynch Bond Fund• Portfolio Structure• Asset Allocation• Comparison of Asset allocation• Comparison of Rating Profile• Comparative Performance

4. Introduction & analysis of DSP Merril Lynch Equity Fund

• Portfolio Structure• Asset Allocation• Comparison of Asset allocation• Comparison of Rating Profile• Comparative Performance

Objective

• To analyze the changes in the Portfolio• How the fund has performed

Background

• DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd.DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd. are companies incorporated in 1983 under the Companies Act, 1956 and are also registered with the Reserve Bank of India as non deposit taking Non-banking Finance Companies. These companies have been functioning as investment companies.

• BlackRockBlackRock is a premier provider of global investment management services to institutional and retail clients around the world managing assets in excess of US$ 1.2 trillion (approx Rs. 56,00,000 Cr.)*. Headquartered in New York, BlackRock serves clients from offices in 19 countries, maintaining a major presence in North America, Europe, Asia-Pacific, and the Middle East. With approximately 5,700 employees, including more than 700 investment professionals worldwide, BlackRock offers clients in-depth local knowledge and understanding, while leveraging the strength of their global presence and infrastructure to deliver focused investment solutions. Today, BlackRock services clients in over 60 countries.

DSP Blackrock Mutual Fund• DSP BlackRock Investment Managers Ltd. is the investment manager to DSP

BlackRock Mutual Fund.• The philosophy of DSP BlackRock Investment Managers Ltd. has been grounded

in the belief that experienced investment professionals, using a disciplined process and sophisticated analytical tools, can consistently add value to client portfolios.

• DSP BlackRock Investment Managers Ltd. takes a three dimensional approach to the management of the organization, incorporating functional, product and regional elements in support of clients' goals.

With three-dimensional approach to managing the organization, we seek to:• Ensure consistency on a global basis;• Allow for the tailoring of products and services according to client or local needs;• Promote teamwork among our employees worldwide; and• Facilitate operational integrity and efficiency

Schemes & their AUM (as on 30,sep’08)

Scheme Details

Non-Equity Market(0ct ‘06)• Bond Markets: The yield on the 10-year Indian government bond remained largely steady, ranging around 7.65-7.70%

• Currency: The USD/INR FX rate closed the month at 45.03 against 45.93 as of September end; this represents an INR

Asset Allocation (%)

Instruments Percentage

Debt 71.24

Money Market 18.25

Cash / Call 10.51

Total 100

As on 30/09/2008

Portfolio as on 30/09/2008

Asset Allocation (%)

Instruments Percentage

Debt 53.42

Money Market 35.77

Cash / Call 10.81

Total 100

Asset Allocation (%)

Instruments Oct '06 Sep '08

Debt 71.24 53.42

Money Market 18.25 35.77

Cash / Call 10.51 10.81

Total 100 100

Rating Profile(in%)Ratings OCT'06 SEP'08

AAA 54.9 31.78

AA+ 34.59 5.56

AA   16.08

A1+/P1+   35.77

CASH& CASH EQUIVALENT 10.51 10.81

TOTAL 100 100

Comparison Of Rating Profile of Instruments

Returns & risk Aggregates             Rating & Risk

 Modern Portfolio Stat  Volatility Measures

 Fund Rating  R-Squared 0.08  Mean 4.35

 Fund Risk Grade Average  Alpha -1.14 Standard Deviation 2.16

 Fund Return GradeBelow

Average  Beta 0.08  Sharpe Ratio -0.4

Market OverviewOCT 2006

• The month of October saw the BSE Sensex Index rise to an all-time high of 13,076 to close at 12,962, an appreciation of 4.07%over the previous month. On a year-to-date basis the Sensex rose 37.92%.• The rally in the market was quite broad-based with stocks across sectors as well as market capitalisation registering gains duringthe month. The BSE Midcap index gained 4.81% followed by the BSE Smallcap Index which gained 3.75%.• India outperformed both emerging markets and Asia in October. India is now the 7th best performing emerging market(year-to-date). After being the second worst performing market during the May crash, India remains the second best performingmarket since the June bottom from the previous month.• The BSE IT index was the biggest gainer with a rise of 9.75% on the back of surprisingly good results by all the major ITcompanies. The BSE Bankex and BSE Capital Goods sectoral indices continued their previous months rally to gain 7.37% and5.64% during the month. The rally in the global metal prices led to a 6.55% rise in the BSE Metals index.

Portfolio allocation as on 31/10/2006 in %

TOP 5 HOLDINGS

Sector Percentage

Industrial Capital Goods 10.23%

Consumer Non Durables 10.82%

Software 10.31%

Auto Ancillaries 7.22%

Banks 6.88%

TOTAL 45%

Top 5 Company Holding

Company Percentage

L&T 4.37%

Reliance Industries 4.02%

Grasim Industries 3.37%

ICICI Bank 2.97%

State Bank of India 2.93%

TOTAL 17.67%

As on 30/09/2008

Top 5 Sector Holding

Sector Percentage

Pharma 9.34%

Consumer non-Durables 8.39%

industrial Capital goods 7.44%

software 5.93%

Media 5.39%

Total 36.49%

Top 5 Compamy Holding

Company Percentage

Hindustan Unilever 4.92%

Oil & Natural Gas Corpn 4.04%

Bharti Airtel 3.41%

Infosys Technologies 2.46%

HDFC Bank 2.15%

Total 16.98%

Sectoral Allocation (oct 06)

Sector Percentage

auto 8.39%

Auto Ancillaries 12.21%

Banks 8.72%

Cement 9.88%

Construction 6.38%

Consumer Non Durables 15.42%

Ferrous Metals 1.10%

Fertilisers 1.20%

Industrial Capital Goods 8.37%

Industrial Products 2.17%

Media & Entertainment 4.01%

Non - Ferrous Metals 2.84%

Oil 0.90%

Paper 0.89%

Petroleum Products 1.72%

Pharmaceuticals 3.11%

Software 4.24%

Telecom - Services 1.74%

Textile Products 0.99%

Others 5.73%

Total 100.00%

Sectoral Allocation (sep 08)

Sector Percentage

Pharma 9.34%

Consumer non-Durables 8.39%

industrial Capital goods 7.44%

software 5.93%

Media 5.39%

Petroleum Products 4.99%

Diversified 4.92%

Auto 4.86%

Banks 4.86%

oil 4.62%

Telecom 4.60%

Power 2.49%

Ferrous metal 2.16%

Gas 1.91%

Hotels 1.37%

Paper 1.19%

Finance 1.11%

Industrial Products 0.94%

Fertilisers 0.91%

Construction 0.62%

Textile Products 0.62%

Pesticides 0.61%

Retailing 0.53%

Hardware 0.52%

Healthcare 0.32%

Telecom equipment 0.30%

Index Futures 3.62%

Debt & Cash & Equivalent 15.44%

Total 100.00%

Sectors Jan FEB March April May June July Aug SepAvg.

holding

Pharma 3.39 4.36 4.36 4.38 9.7 9.7 9.95 11.07 9.34 7.36

Consumer non-Durables 7.57 7.6 7.6 8.39 6.57 6.57 7.47 8 8.39

7.57

industrial Capital goods 7.8 8.75 8.75 7.53 6.44 6.44 8.63 7 7.44

7.64

software 4.73 7.11 7.11 11.61 11.63 11.63 6.59 10 5.93 8.48

Media 3.3 4.04 4.04 4.28 6.44 6.44 4.43 5.1 5.39 4.83

Petroleum Products 8.61 6.77 6.77 8.93 6.92 6.92 5.88 4.58 4.99 6.71

Diversified 0 0 0 0 5.75 5.75 3.91 4.58 4.92 2.77

Auto 0 0 0 0 1.68 1.68 1.23 4.59 4.86 1.56

Banks 19.4 5.16 5.16 7.35 1.73 1.73 6.89 5.67 4.86 6.44

oil 2.32 4.72 4.72 4.41 3.47 3.47 3.12 2.37 4.62 3.69

Derivatives 2.99 4.5 4.5 1.12 0 0 4.59 1.96 3.62 2.59

% of holding in top 10 sectors & derivatives

Returns and Risk Aggregates

  Rating & Risk

 Modern Portfolio Stat  Volatility Measures

 Fund Rating  R-Squared 0.9  Mean 17.6

 Fund Risk Grade Below Average  Alpha 6.26 Standard Deviation 30.9

 Fund Return Grade Above Average  Beta 0.92  Sharpe Ratio 0.4

Findings• Rating of Asset in DSPML bond fund has

declined in the last two years• Equity fund has moved its funds from growth

sectors to more stable sectors• Equity fund has increased its exposure to Cash

& simultaneously reduced its exposure to equity.

Thank you