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| Background: DSPML Balanced Fund was launched in May 1999. Entry into the fund requires a minimum investment of Rs 1,000.
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| There is no entry or exit load in the scheme but investments redeemed within a year of investing will be subject to a 1.25 per cent contingent diferred sales charge.
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| Performance: Even though the first three years after its launch weren't anything to write home about, the fund's sparkling performance over the last year suggests that it deserves a closer look.
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| Since October 2002, it has outperformed the average balanced fund in every quarter. This is reflected in its returns in the trailing one year, which stand at 70.19 per cent.
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| Portfolio: The fund's equity portfolio has generally been well-diversified and its debt portfolio has had quality bond holdings without being too volatile.
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| During most of 2000 and 2001, the fund's returns were just enough to keep it in the third quartile of the category.
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| Although it maintained a 60:40 equity-debt mix, its overexposure to technology and FMCG stocks kept things depressed. Then, in the first half of 2001, high tech exposure along with the poor performance of its large-cap holdings like ITC, SBI and Reliance spoilt its returns.
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| Though the fund reduced its tech exposure after 9/11, the move did not help it as the sector gained handsomely during that period.
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| In early-2002, high exposure to the energy sector helped the fund maintain ground but in the subsequent two quarters, its large-cap buy-and-hold strategy failed to set its NAV graph on fire.
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| The fund's fortunes finally turned in the last quarter of 2002 when the overall sentiment in the equity markets revived. What is more interesting is its consistent outperformance compared to its peer group since then.
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| During this period, top performing sectors like pharma, energy and financial services have accounted for nearly half of the fund's equity assets. Picks like ONGC, Ranbaxy, State Bank, Canara Bank and Punjab National Bank have made large gains in the rally.
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| The fund's debt interests have mostly been in AAA bonds and gilts, which, along with a sizeable cash allocation, have helped it guard against losses in the volatility that fixed income funds faced during the third quarter of 2003.
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However, during this year, the fund
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