The Hindu Business Line : DSPML Balanced Fund: Fresh entry into metals, media and paper

DSPML Balanced Fund appears to have found investment opportunities in the recent market correction. In June-August 2006, it took fresh exposure in a number of stocks and also increased its equity allocation marginally from 64 per cent to 69 per cent. Software replaced consumer goods as the sector with maximum allocation. Although both these sectors are classified as defensive, IT stocks proved to be relatively more stable in the recent market volatility compared to consumer goods. This may have prompted the shift. Exposure to cement and pharma stocks increased while capital goods, banking and power underwent some pruning.

With the addition of Satyam Computer Services, Patni Computer Systems and Mphasis BFL exposure to IT stocks increased to 9.8 per cent. Holdings in Tata Consultancy Services also trebled. Hinduja TMT was the only stock in the space to move out of the portfolio.

Sector churns: DSPML Balanced made fresh entry into ferrous metals, media and entertainment and paper. In the ferrous metals segment, Tata Steel and Sesa Goa were added. Entry of HT Media, Television Eighteen India, UTV Software Communications and Zee Telefilms brought the allocation to media at 2.3 per cent of the total assets. Ballarpur Industries was the sole representative from the paper industry.

Chemicals, fertilisers and power stocks made their way out over this period . United Phosphorous, Godrej Industries and Tata Chemicals were sold. Power generation companies NTPC and Reliance Energy Ventures lost favour and exited the portfolio.

The fund reduced its holding in the banking space by exiting Allahabad Bank and Andhra Bank. Pharma underwent some shuffling as the fund sold Dr Reddy's Laboratories and Novartis. Cipla was added afresh while GlaxoSmithkline Pharma was accumulated.

The bull rally of a number of construction stocks slowed down since the correction in May 2006. This may have prompted the fund to exit B.L. Kashyap & Sons and Patel Engineering. Instead, it bought into Hindustan Construction, a bigger player in terms of revenue and market capitalisation.

The fund maintained its exposure to debt at about 30 per cent. Holdings in floating rate debt instruments of over 182 days increased from 4.7 per cent in May 2006 to 10 per cent in August 2006.

: DSPML Balanced is an equity-oriented balanced scheme launched in 1999. As of August 2006, over 75 per cent of the equity allocation was invested in stocks with a market capitalisation of over Rs 4,000 crore. Asset size as of August was Rs 359 crore.

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