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Shanthi Venkataraman

INVESTORS can consider exposures to DSP-ML Opportunities Fund. The fund invests predominantly in large-cap stocks, which makes it ideally suited for a conservative investor.

The large-cap bent of its portfolio makes the 47 per cent return that it has generated over the year particularly impressive; other top-performing diversified funds have packed their portfolios with mid-cap stocks to race to the top of the rankings. The fund has also outperformed the likes of HSBC Equity and Franklin Bluechip over the past year.

The fund sports a well-diversified portfolio. But the large number of stocks in its portfolio may make managing the fund more cumbersome and would increase the number of calls the fund manager would have to make. With no stock accounting for more than five per cent of its assets, however, performance of the fund is unlikely to be affected by sharp price movements in any one stock.

Investors can consider investing in the fund in phases by way of a systematic investment plan, to reduce the risk of bad timing of investments.

Performance: The fund had a rough patch in 2001, when it underperformed the Sensex. Since 2002, however, it has more than compensated its investors for their initial losses, consistently outpacing the Sensex by more than 15 percentage points. The fund has turned in an annual return of about 50 per cent on a three-year basis, placing it among the top diversified funds.

Over the year, the fund has added a few more mid-cap stocks to its portfolio, which has pepped up returns. Stocks such as Strides Arcolab, GE Shipping, United Phosphorous, Sesa Goa, which appreciated smartly over the past year, now figure in its portfolio.

Portfolio overview: The fund sticks to conventional sectors, such as software, banking and oil. These three sectors are its top three holdings and account for less than 30 per cent of its assets. The top ten holdings account for about 35 per cent of its assets.

About 30 per cent of the fund's assets are invested in stocks with a market capitalisation of less than Rs 3,000 crore. The stocks in its portfolio, on an average, trade at a multiple of 12 times their earnings per share. The portfolio, therefore, offers good scope for appreciation.

DSPML Opportunities was launched in May 2000. The fund has an asset base of about Rs 600 crore. The minimum investment amount is Rs 5,000. Dividend and growth options are available.

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