The Hindu Business Line : DSPML T.I.G.E.R: Hold

DSPML's T.I.G.E.R (The Infrastructure Growth and Economic Reforms) Fund seeks to invest in stocks of companies that would benefit from economic reforms and an infrastructure thrust.

It has delivered returns comparable with those turned in by large-cap funds such as HDFC Top 200 and Franklin India Bluechip over the past year.

Given its more recent vintage, investors should see how the fund handles multiple market phases before committing fresh investments. Unit-holders may stay invested.

Sector funds normally perform well in a bull market and trail the market when it undergoes a correction. The fund, launched during the steep drop of May 2004, is witnessing its first major correction.

Being a thematic fund, the risk profile is high. However, the well-diversified portfolio has helped the fund beat its benchmark index, the BSE-100.

Performance: The fund returned 52 per cent over the past year, outpacing its benchmark by 8 percentage points.

Its performance is better than diversified funds such as HDFC Growth and Magnum Contra, which sport a similar combination of large- and mid-caps. Thematic funds adopt active portfolio management rather than a buy-and hold strategy.

After the first quarter of this year, the fund started trailing its benchmark, because of its mid-cap exposure. This resulted in the fund surrendering most of the gains of the past year.

Suitability: The DSPML T.I.G.E.R fund is suitable for the aggressive investor, given the attendant risks of a theme-based fund. Hence, risk-averse investors can look at diversified funds with a good track record.

Portfolio overview: The fund has been overweight on capital goods for more than six months now; this accounts for one-fourth of its assets.

The fund has 61 stocks in its portfolio and the top ten accounts for 35 per cent of assets. The fund appears to churn its portfolio often.

In the past six months, the top five sectors have changed frequently. Capital goods, cement and petroleum products account for 46 per cent of the portfolio.

The fund has 52 per cent invested in large-caps and the rest in stocks with a market cap of less than Rs 5,000 crore.

Fund facts: The fund was launched in June 2004 and is managed by Mr Soumendra Nath Lahiri. Its asset size is Rs 916 crore.

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