The Hindu Business Line : DSP ML Equity Fund: Hold

INVESTORS can stay with DSP ML Equity Fund, which has delivered a return of about 70 per cent over the past year. This places it in the upper quartile of the performance charts.

The fund has a reasonably good track record over a three-year period.

Over the past six months, however, the performance appears to have slowed down relative to its peers with returns more in line with the market. Fresh exposures can, therefore, be avoided for now.

Suitability: With a blend of mid-cap and large-cap stocks, the fund bears a risk profile similar to that of a typical diversified fund. The portfolio is tightly packed with as many as 70 stocks. The fund does not take concentrated bets; exposure to any single stock barely exceeds four per cent. In a rising market, this level of diversification might not help performance, as sharp price movements of a single stock would not have a significant impact on returns. The fund need not form a part of your core portfolio.

Performance: The fund did not perform well during the bearish phases of 2000 and 2001.

It underperformed the benchmark indices in both these years.

Since 2002, however, its performance has picked up significantly.

Over the past year, the fund has delivered a return of about 70 per cent, beating its benchmark, the Nifty, by an impressive 20 percentage points.

The presence of mid-cap stocks in its portfolio appears to have helped performance.

Notably, it also outpaced the broad-based index S&P CNX 500 by a wide margin.

Portfolio overview: The top ten holdings are heavy on large-cap stocks. A number of small-cap stocks, however, also figure prominently in its portfolio. These include Rico Auto, KPIT Cummins, Adlabs Films, Ceat and Rajasthan Spinning.

About 30 per cent of its assets is invested in stocks with a market capitalisation of less than Rs 2,000 crore.

The fund, which once had a concentrated exposure to IT sector, now sports a far more diversified portfolio.

The top three holdings — banking, capital goods and software — account for about a third of the total assets.

Fund facts: DSP ML Equity was launched in April 1997. It has an asset base of Rs 170 crore.

The minimum investment amount is Rs 5,000.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
New variants is always on the cards

`Synergy' report unlikely to energise oil stocks

DSP ML Equity Fund: Hold

Alliance Basic Industries: Sell

Reliance Mutual Fund

Suggest a close-end fund