Consistent returns with low volatility makes fund attractive
01-Apr-2007 •Value Research
Hosting Good Times
When referring to sector funds, consistency is not what most people think of. But this fund aims at just that and has succeeded. It has consistently beaten the category average over the past five years. By being well diversified, restraining the number of mid-and small-cap stocks and limiting exposure to single stocks, the fund has managed to deliver good returns at low volatility. In the past 36 months, the portfolio has had an average of 28 stocks. And allocation to individual stocks, barring Infosys which is currently at 16.48 per cent, is mostly restricted to a single digit (NIIT follows in the second place at 9.21 per cent).
Towards the end of 2004, the fund tilted from a mid-cap orientation to a large-cap one. Resisting the urge to follow the herd and fill its portfolio with mid- and small-cap stocks, the fund stuck to its conviction. Currently, 44.35 per cent of its portfolio is in large-caps.
Its strategy has held it in good stead in the current turbulent market. As on March 13, 2007, its year-to-date returns are ahead of the category average ( 0.71 per cent) at 8.41 per cent. While the one-month returns of the category average showed a loss (-4.28 per cent), this fund showed a gain of 0.31 per cent. Its three-month returns of 20.11 per cent are phenomenal when you consider the category average of 9.72 per cent. Another important feature of the fund is its love for the buy -and-hold strategy. Few of the stocks like Infosys, HCL Technologies, Satyam and MphasiS BFL have been with the fund since launch. Others like Bharti Airtel, City Online Services, I-Flex Solutions have been with the fund for long periods. Bharat Electronics, with the fund since launch, was sold in September last year.
This well diversified mix of stocks makes DSPML Technololgy.com a good option in the tech category.