VR Logo

Space for All

By far the most consistent member of the tech category, this fund offers a well-diversified portfolio and relatively low volatility. It is well-equipped to handle the turbulent technology sector

Two manager changes in the last six months might not impress DSPML Technology.com investors but we feel they have several other reasons to stay put here. By far the most consistent member of the tech category, this fund offers a well-diversified portfolio spread over large-, mid- and small-cap stocks and relatively low volatility. We believe it is one fund that's well-equipped to handle the turbulent technology sector.

Coming back to issue of change in leadership, the fund house appointed Apoorva Shah as fund manager in April. Shah would also be managing DSPML Top 100 and three MIPs. Prior to joining DSPML AMC, Shah was with GPC India as portfolio advisor and head of products and also has an experience of working with DSP Merrill Lynch for seven years. Though he has kept the portfolio almost intact, during his short tenure with the fund, the manager has effected a few changes. In May, he sold off four stocks, including close to 4 per cent allocation to IT major Wipro. He built positions in three stocks including NIIT, Rolta India and Megasoft. Though it's too early to comment on his investment approach, Shah faces the challenge to maintain the fund's consistent performance record in tough times like these.

Except for a minor underperformance in 2001, the fund has always put up a better show than an average peer. In the five-year period ending August 16, 2006, the fund's 37 per cent annual return makes it the best in the category. But the fund has lost massively during the market fall this year. Over the three month period ending August 16, the fund is down over 7 per cent, much more than the category's loss of 2 per cent.

What separates this fund from others in the category is the management's strong conviction in diversification. It has consistently maintained a portfolio of around 25-30 stocks. Except for Infosys, allocation to individual stocks has been restricted to single digit on most occasions. Another important feature of the fund is its love for buy and hold strategy. For instance, the fund has been holding Bharat Electronics, HCL Technologies, Infosys, MphasiS BFL and Satyam since launch. This disciplined approach has meant good returns year after year.

Last year, when all the category outperformers earned their returns through a portfolio heavily skewed towards mid- and small-cap stocks, this fund scored a win by sticking to a large-cap tilted, well-diversified portfolio.

DSPML Technology.com deserves to manage much more than Rs 28 crore that it manages at present.