The Hindu Business Line : DSPML Opportunities: Invest

While not investing in a pre-determined sector or theme, the fund aims at identifying "hot" sectors in advance and takes focussed exposures accordingly.

DSPML Opportunities continues to be a good option for investors who wish to capitalise on prevailing sector themes. It is a superior alternative to sector or theme funds, where returns could plummet if the theme in question goes out of favour. DSPML Opportunities, however, does not invest in a pre-determined sector or theme. The fund aims at identifying "hot" sectors in advance and takes focused exposures accordingly.

It is a predominantly large-cap fund and should not be confused with other "opportunities" funds, which invest across market cap ranges. HSBC India Advantage and Principal Focussed Advantage and to some extent Franklin India Opportunities are comparable funds. DSPML Opportunities has a superior track record than these funds and remains in our set of preferred funds.

The fund takes aggressive positions in sectors unlike typical diversified funds. Returns, therefore, remains susceptible to performance of the fund's top sector choices. As such it may be more appropriate for investors with an above average risk appetite.

Superior performance hinges upon the fund's ability to pick the right sectors ahead of the market. The fund has managed to pull this off in the past, as is evident from its strong track record over the past five years.

Performance: DSPML Opportunities has delivered a return of 51 per cent over the past year, beating its benchmark the Nifty by about three percentage points. To put things in perspective, less than 40 per cent of diversified equity funds have managed to beat the bellwether index over this period. The fund figures in the top 25 per cent.

The fund handled the correction in May well, falling only as much as the Nifty when the index touched its low.

With less than 15 per cent allocated to stocks with a market capitalisation of less than Rs 5,000 crore, the fund was saved from the brutal sell off in the mid-cap space. A combination of its holdings in software, cement and capital goods may have also helped contain declines.

Over a three-year and five-year period, the fund's performance looks more impressive, even when compared to a broader benchmark such as the BSE 200. DSPML Opportunities beat BSE 200 more than 70 per cent of the time.

Portfolio overview: The fund continues to be bullish on software, capital goods and cement, which form its top three holdings. Together they account for about 40 per cent of the assets.

Holdings within sectors are straddled across several stocks.

The overall exposure to stocks, too, appears to be capped at about 6 per cent. The portfolio is packed with about 60 stocks, which appears reasonable given its size; the fund has an asset base of about Rs 1,300 crore. Television Eighteen, Hexaware Technologies, Karur Vysya Bank and Mastek are some of the prominent mid-cap stocks in its portfolio.

Fund facts: DSPML Opportunities was launched in April 2000. The minimum investment is Rs 5,000; in the case of an SIP, the minimum amount is Rs 1,000.

An entry load of 2.25 per cent will be payable for investments less than Rs 5 crore. The NAV of the growth option is Rs 53.48.

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