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Suresh Krishnamurthy

INVESTMENTS in DSP ML Opportunities can be considered. Barring 2001, the performance of the scheme relative to that of S&P CNX Nifty has been better. DSP ML Opportunities is large-cap oriented fund that sports an extensively diversified profile.

Investments, however, can be considered in small lots for a number of reasons. One, the fund's performance bounced back strongly only after `A' group stocks rose in value in 2002 and was sustained because of the dramatic bull-run during 2003. The stock picking skills have not been tested in a market downturn.

Second, the changes in monthly returns have been more volatile than a number of peer funds, although it is still only on par with that of Nifty.

The positive aspect is that the fund has outperformed Nifty in 24 of the past 32 months. On an average, the fund outperforms Nifty by about 2 percentage points in a month. In this context, cautious investors can test the waters by investing in small lots, preferably through a systematic investment plan, before enhancing their exposures.

Investing through systematic investment plans does not attract entry loads. Investors can stay on but without enhancing exposures now.

Performance: The fund was launched in the hey-days of 2000. The poor launch timing and its investment strategy saw the fund underperform its peers in 2000 and 2001. It has since changed tack and is now among the top-performing equity schemes.

In addition, on a risk-adjusted basis, the fund has outperformed its benchmark Nifty comfortably. The superior performance, however, is largely due to the outsized returns of 2002 and 2003.

Portfolio allocation: Opportunities is a larger fund with assets under management of about Rs 618 crore at the end of September 2004.

The top exposures were Grasim Industries, State Bank of India, Reliance Industries, Infosys Technologies and Bharat Heavy Electricals. Totally, there were 52 stocks in its portfolio.

In terms of sectors, IT, auto, banks and oil & gas are the major exposures. These sectors account for nearly 42 per cent of the net assets. Diversified stocks account for another 18 per cent.

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