The Hindu Business Line : DSPML Opportunities Fund: Upbeat on software, telecom and media

This week we look at a fund whose investment objective is to respond to the dynamic economy by moving investments across sectors. Here is an analysis of DSPML Opportunities Fund's portfolio shuffle between April and July 2006. The fund stepped up exposure to sectors such as software, capital goods, telecom services and media and entertainment. Ferrous metals were added afresh, while consumer non-durables, banking, cement, auto, pharmaceuticals and non-ferrous metals were pruned.

Of the 58 stocks in the portfolio, the top ten account for 34 per cent of the assets. Infosys Technologies replaced Reliance Industries in cornering the highest asset allocation. Software stocks were re-rated on the back of strong earnings guidance from Infosys. Exposure to the stock almost doubled. Similarly, the fund enhanced the exposure to stocks such as HCL Technologies, i-flex Solutions, Satyam Computers and TCS. Hexaware was the lone stock to be added.

Capital goods, which witnessed profit-booking by most funds during the May 2006 correction, has now found favour with the DSPML-OF and exposure to this sector was enhanced. The Siemens stock was accumulated further, while BHEL was added marginally. However, Crompton Greaves and Voltas were trimmed.

In the telecom space, exposure to Bharti Airtel increased, while Reliance Communication and MTNL remained unchanged from the previous quarter.

Ferrous metal stock Tata Steel was added afresh. Non-ferrous metals lost the fund's fancy and exposure to the sector was pared. However, Sterlite India was added.

Banking, one of the underperformers of the past year, failed to get the support from the fund and asset allocation to this sector was reduced. Exposure to State Bank of India and Punjab National Bank was pared. Syndicate Bank and Oriental Bank of Commerce moved out completely.

The consumer non-durables space also underwent a minor re-jig. Hindustan Lever was the only stock pared while exposure to ITC, Shree Renuka Sugar and Nestle was increased. McLeod Russell India was added afresh.

Suresh Parthasarathy

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