Too many cooks can not make a good broth - for frequent change of managers, have failed to give a definite character to the fund. Its time now that the fund charts a clearly defined strategy with a stable manager.
In its four years tenure, the fund has delivered a return of 13.97% against the market return of 4.04% by pursuing various investment strategies. Initially in a range bound market, the fund moved in and out of cash. Shifting from the questionable strategy by late 1998, the fund largely invested in a diversified bundle of stocks while actively rotating in and out of sectors. While infotech, consumer goods and pharma were among the top sectors, the fund carried a fair allocation to economy stocks.
However, with the new manager at helm in the late 1999 the fund witnessed a complete change in strategy. Fresh thinking coupled with the rising valuations of the ICE sector saw DSPML Equity seek a higher allocation to technology stocks. With a 61% allocation to technology stocks the fund scaled a high of Rs 42 in early 2000. However with a unhealthy concentration, the performance was not sustainable. Further, the fund's buying into unlisted securities such as SIP technologies at the peak of the rally has eventually turned out to be a drag on the portfolio. Its unhealthy concentration cost the fund and saw it lose 32% in 2000 against the category average loss of 20% in 2000. With the third manager taking over the fund has since acquired a more diversified flavour with investments in quality stocks.
Though the fund stands diversified today in to quality counters, it has to be seen whether the fund manager continues to maintain the same complexion for steady returns.