DSPML Tech's buy-and-hold strategy has yielded impressive results.
DSPML Technology.com was launched in April 2000. The fund charges an entry load of 2.25 per cent. The minimum investment is Rs 1,000, while subsequent investments can be made in multiples of Rs 100.
DSPML is one of the top picks in its category. A consistent above-average performance and low volatility make the fund a good choice for investors. Maintaining an evenly balanced portfolio of large- and mid-cap tech stocks, it has offered the best risk-adjusted returns among category peers. It has been ranked among the top three in the category since 2002.
Like many tech funds, this fund, too, was launched at the peak of the tech boom in April 2000. It posted a loss of 36 per cent in 2001 but hasn't looked back since then. Years 2002 and 2003 were rewarding which enabled it to make up for losses in the preceding years.
Since mid-2002, tech mid-caps have been one of the fund's favourite hunting grounds. Considerable exposure to E-Serve, Bharat Electronics and Moser Baer, whose share prices rose many times, helped it post category-beating returns of 67 per cent through 2003. Diversification in the portfolio has also helped it mitigate losses when tech stocks crashed in April 2003.
The fund was the second-best performer in the category in 2004 with returns of 26.99 per cent against the category average of 23.77 per cent. A change in focus from mid-caps to large-caps like Infosys, Bharti Televentures and Wipro helped it stem losses and contain volatility.
The fund consistently maintained a portfolio of around 25-30 stocks. Except for Infosys, no other scrip has ever accounted for more than 10 per cent of its total assets. It largely adopted a buy-and-hold strategy. For instance, it has been holding Infosys, Satyam, Wipro and E-Serve International for long.
Top holdings
As on March 31, 2005
Value (Cr)
Net Assets (%)
Infosys Technologies
6.17
23.9
Tata Consultancy Services
2.66
10.31
Wipro
2.33
9.02
HCL Infosystems
1.54
5.96
Satyam Computer Services
1.52
5.88
Bharti Tele-Ventures
1.49
5.77
Geometric Software Solutions
1.06
4.11
Avaya Global Connect
0.87
3.35
Patni Computer Systems
0.85
3.31
Hexaware Technologies
0.82
3.19
HCL Technologies
0.73
2.85
KPIT Cummins Infosystems
0.67
2.58
Bharat Electronics
0.63
2.43
Infotech Enterprises
0.61
2.37
Spanco Telesystems & Solutions
0.48
1.86
i-flex solutions
0.46
1.78
TV Today
0.42
1.64
Hinduja T M T
0.41
1.59
Adlabs Films
0.34
1.31
Flextronics Software Systems
0.22
0.87
The lowest minimum investment limit in the category is an attractive feature. It can be a safe boat for those who want to venture out in the rough seas of the technology sector.
-Value Research
Returns in % as on April 21, 2005
FMCG sector funds continued to lead other equity sectoral categories as far as average category returns for one year are concerned. For the past month, too, they were the only category to post a positive return, while others suffered from the general meltdown in market sentiment.
Sectoral funds Average category returns (%)
1 month
1 year
FMCG
40.86
0.08
Technology
25.92
-8.31
Banking
25.03
-7.56
Pharma
17.81
-3.96
Auto
17.11
-1.89
Petroleum
-4.54
-2.51
Indices
BSE IT
29.54
-8.23
BSE Bankex
16.32
-4.93
BSE FMCG
11.91
5.59
BSE Health Care
-1.37
-6.24
BSE Auto
-1.95
-0.65
BSE Oil & Gas
-10.64
-1.7
Source: www.mutualfundsindia.com
Tech funds have been facing the heat, following poor results from Infosys and TCS. While the category has done well over the past year with 25.92 per cent returns, it has been the worst of the lot in the past one month. Only two funds - Alliance New Millennium Fund (31.17 per cent) and SBI Magnum Sector Umbrella Fund - Infotech (30.36 per cent) - managed to beat the benchmark BSE IT Index which gave a return of 29.54 per cent.
IT sector funds
1 month
1 year
Alliance New Millennium
31.17
-6.92
SBI Magnum Sector Umbrella
30.36
-7.26
Franklin Infotech Fund
27.11
-11.44
Prudential ICICI Tech Fund
27.08
-4.64
DSP ML Technology.com Fund
22.48
-7.95
UTI Growth Sector Fund - Soft
22.04
-8.18
Kotak Tech Fund
21.22
-11.79
Tata Life Sciences and Tech Fund
19.62
-2.54
Tata Life Sciences & Technology Fund, which has a blend of technology and pharma stocks, was least affected by the crash in technology counters recently. On the contrary, Kotak Tech Fund and Franklin Infotech Fund were the worst hit.
