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Shanthi Venkataraman

INVESTORS can hold onto their units in DSP ML Top 100 Equity Fund. The fund has performed steadily since its launch in February 2003. However, fresh investments can be considered after evaluating it over a longer period.

Suitability: The fund invests in the top 100 stocks in terms of market capitalisation. As it invests in predominantly large-cap stocks, it limits the risks as also the potential for higher returns that could be earned by investing in mid-cap and small-cap stocks.

Investors who wish to include large-cap funds in their portfolio may consider investing in this fund. However, it may not be prudent for an investor to hold only this fund in his portfolio as it is a relatively new, and its ability to perform well consistently can be evaluated only over time.

Such investors can consider switching to funds with a longer track record of good performance, such as Franklin India Bluechip. Investors who have other funds in their portfolio may hold on to their investment in the Top 100 Equity fund and keep track of its performance before they consider a switch.

Performance: The Top 100 Equity fund has outperformed its benchmark, the BSE-100, significantly during the bull period of April 2003-Jan 2004. The fund has turned in a return of 132 per cent during this period as against the BSE 100, which turned in about 106 per cent. It has also managed to beat the index during the downward correction that has ensued since January.

The decline in NAV in this period has been about 17 per cent as against the 19 per cent decline in the value of the BSE 100. Its performance is also largely in line with that of its peers, Franklin India Bluechip Fund and Templeton India Growth Fund.

Portfolio: The fund is well diversified. Its portfolio consists of about 30 stocks with exposure not crossing 8 per cent in any stock.

Cash holdings constituted about 5 per cent of the total portfolio as on April 30. The assets under management have grown considerably in the past year and stand at Rs 138 crore.

Fund facts: DSP ML Top 100 Equity is an open-ended scheme, started in February 2003. The fund offers both dividend and growth options. The minimum application amount is Rs 1,000.

The entry load for the fund is 2 per cent for investments less than Rs 5 crore; there is no charge for investments greater than Rs 5 crore. There is no exit load.

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