Despite the dotcom name, which, in hindsight, was an unfortunate choice, DSPML is one of the picks of this category. A consistent above-average performance and low volatility makes this fund a good choice for investors. Maintaining an evenly balanced portfolio of large- as well as mid-cap tech stocks, DSPML Technology.com has the best risk-adjusted return (Sharpe Ratio) among the category. The stock picking by the fund is also commendable and has taken care of both stability and above average returns. The fund has always been ranked among the top three in the category since 2002.
Of course, like many tech funds, this fund too was launched at the peak of the tech boom in April 2000. It posted a loss of 36 per cent in 2001 but hasn't looked back since then. 2002 and 2003 were its golden years, which enabled it to make up to investors for the initial losses. Since mid-2002, tech mid-caps have been one of DSPML Technology.com's favourite hunting grounds. Considerable exposure to the likes of E-Serve, Bharat Electronics and Moser Baer, whose share prices rose many times helped it post category-beating returns of 67 per cent through 2003.Also, diversification in the portfolio has helped the fund in mitigating losses when the tech stocks crashed in April 2003.
In 2004 too, the fund has been the second best performer in the category with returns of 26.99 per cent against the category average of 23.77 per cent . A change in focus from mid-caps to large-caps like Infosys, Bharti Televentures and Wipro has helped it stem loss and contain volatility.
The defining feature of this fund has been diversification. It has consistently maintained a portfolio of around 25-30 stocks. Except for Infosys, nothing else has ever accounted for more than 10 per cent of the fund's total assets. On the strategy front, DSPML Technology.com has largely believed in buy and hold practice. For instance, the fund has been holding Infosys, Satyam, Wipro and E-Serve International for long.
The lowest minimum investment limit in the category is an additional benefit that this fund offers.
This article was originally published on May 11, 2005.
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