The Hindu Business Line : DSPML Equity Fund: Defensive moves

DSPML Equity Fund is a diversified fund with a large cap (greater than Rs 7,500-crore) bias, but mid- and small-cap stocks do account for over 33 per cent of the portfolio, going by the fund’s April fact-sheet. The fund has been in existence for over 10 years and has consistently beaten its benchmark — S&P CNX Nifty — over one-, three- and five-year periods.

Over the October 2007-April 2008 period, the NAV has fallen 7.1 per cent while the assets managed rose 6.4 per cent, despite a dividend payout of Rs 7 per unit in January. This may indicate that the fund received substantial inflows in this period.

Sector Moves:Between October and April, the fund appears to have reduced exposures to themes that were hot last year, and switched (where valuations have melted down) to more defensive sectors. The portfolio moves over the past six months appear to have been driven by defensive considerations, with profits booked in the fancied sectors of last year.

Software, the sector that was out of favour last year, has seen exposures tripled to 11.6 per cent currently to become the top sector held. Consumer non-durables has seen substantial increase in exposures, so has pharma; all three are now among the top 10 sectors held.

Banks, which had reversed sharply in recent months, declined to half the exposure levels of six months ago. Capital goods and construction sectors were also trimmed. Exposures in petroleum, oil and gas, and media were maintained during this period.

Stock Moves: The April portfolio reveals a fragmented exposure to stocks with as many as 74 stocks featured across 25 sectors. No stock constitutes more than six per cent of the portfolio, even among the top 10 stocks.

Infosys, Satyam Computer and TCS, that delivered negative to flat returns over a six-month period, found their way into the portfolio.

Hindustan Unilever, Asian Paints, Hero Honda, and Balrampur Chini, which delivered 17-30 per cent in this period, are some of the entrants during this period. So are Tata Communications, Ranbaxy Labs, ICICI Bank, Dr Reddy’s Labs and Indian Hotels.

High-profile stocks such as Reliance Communications, SBI, Tata Steel, and NTPC, which fell 9-25 per cent exited. Reliance Industries, L&T, ONGC, Tata Power and Nestle India were retained.

So were Educomp Solutions, Bharat Electronics, HT Media, NDTV and Tata Chemicals.

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