Large-cap orientation has fuelled returns

FUND ANALYSIS: DSPML Balanced

With a large-cap dominated portfolio, the fund has delivered good returns over the years. Its five-year annualised return of over 33.51 per cent (ranking it fifth among 20 funds) is proof of this. A relatively low expense ratio is another added advantage.

Though the fund underperformed its category in 2005, it has clawed its way back, beating an average peer in each of the last three quarters. Its large-cap orientation has helped the fund post 31.69 per cent return in 2006, much higher than the category average of 26.81 per cent.

The fund's performance in the first half of 2006 was average as it landed in the second quartile in the beginning of the year. The fund as of December 31, 2006, held 72 per cent of its assets in equity diversified across 65 stocks.

Currently, the top five holdings of the fund consume 32 per cent of its net assets. Exposure to technology stands at 17 per cent while construction and FMCG are the other top sector holdings of the fund.

The fund seems to have mastered the art of correcting its mistakes. In 2005, select chemicals, construction and consumer non-durable stocks, such as Balrampur Chini, ITC and Williamson Tea Assam, helped the fund stage a recovery in the second half of 2005.

The fund had staged a similar comeback in the past as well. In the next two years, it was among the best five funds in the category. In December 2006, the fund had 65 stocks in its portfolio.

On the debt side, the fund has been quality conscious.