DSP ML TIGER Fund- The Star Performer

DSP ML TIGER Fund- The Star Performer If you are looking for funds with spectacular performance, DSP ML Tiger is one of the best funds in the large cap space that investors should consider strongly. Launched in May 2004, DSP ML Tiger is equity oriented diversified open-ended scheme. It aims to generate capital appreciation, from a portfolio that is substantially constituted of equity securities and equity related securities of corporate, which could benefit from structural changes brought about by continuing liberalization in economic policies by the government and/or continuing investments in infrastructure, both by the public and private sector.

DSP ML Tiger stood firm to its objectives to generate capital appreciation by delivering excellent returns in recent years. Over the last one year, the fund presented annualized return of 49.80% beating the benchmark BSE 100 Index by a whopping margin of 17.68 % (DSP ML Tiger returns of 49.80% Vs benchmark returns of 32.12 %). The returns over the last two and three year period were 50.45% and 55.29% compared to benchmark 37.33 and 41.68 respectively. In the near term also, the fund presented annualized return of 34.42% in last six months, as against 24.58%, delivered by benchmark in the same period.

Moving forward to investment pattern, the fund targets high growth stocks particularly in large-cap space, at an appropriate time. It's better, if we understand more about the investment philosophy and stock picking approach from fund manager. Soumendranath Lahiri, fund manager said, ``we are essentially bottom-up stock pickers with a degree of top-down macro analysis. Around 60% of our effort is bottom-up stock picking and the remaining 40 is top-down analysis, sectoral trends, macro analysis, etc. In India, we have not as yet gotten into that growth-value select focus verticals that you find in other global markets. But broadly I would say that, we are growth investors. But within that, there is a segment called growth at a reasonable price which is a nomenclature used in the West - GARP. We are in that category, he added.

The fund total assets corpus zoomed 98.15% to Rs 224,17.26 million in Aug. 2007 from Rs 11,313.04 million in Sep. 2006. The fund allocated 36.86% of its portfolio to giant size companies, 20.93% to large caps, 35.55% to midcaps and 4.64% to small caps. The fund is betting on sectors such as construction, banks, telecom and industrial capital goods. Lahiri said, `` we continue to remain bullish on these sectors and we feel that there is significant value that can be extracted over the long term``.

Since government spending on infrastructure is the most important growth driver for construction companies, the proposed increase in allocation in union budget will translate into awarding of more projects. The finance minister in the union budget acknowledged the demands of the telecom sector to have a single levy instead of the current multiple levies and if the proposal of single levy goes through, it could usher in respite for the telecom service providers. With the government envisioning a telecom subscriber base of 650 mn by 2012, looks like the government is going to put its best foot forward in helping the sector to thrive. Structural reforms have paved the way for a change in the dynamics of the Banking sector. Besides gearing up for the compliance with Basel-II accord, the sector is also looking forward to consolidation and investments on the FDI front.

The fund manager has maximum exposure to stocks like Reliance Industries (5.23%), JaiPrakash Associates (3.51%), Bharti Airtel (3.34%), BHEL (3.33%) and Sesa Goa (3.11%). The top three sectors have asset allocation of 35.08 % and the top five holdings constitute 18.52 % of assets. The Asset allocation of the fund is as follows Equity 91.38 % and others 8.62 %. The fund has no exposure in debt as on July end.

When asked about overall outlook of the market, Lahiri said, ``the market is currently trading at 16.5 times its estimated FY08 earnings. Stocks have shed significantly from their July highs and valuations on many stocks are attractive. The uncertainties looming over the markets have their source in two major factors, the political turbulence and the US sub prime market concerns. The intensity of the US sub prime rate crisis is yet not clear and it is difficult to gauge how much more pain is still to come. As long as there is unpredictability on the issue, volatility will continue to mar global markets in the near term.`` Locally our concerns are fewer. Earnings growth will continue to chug along. If it was 33-% last year Fiscal`07, it should be 15-16% this year, after accounting for an increase in interest rates and other factors. In that context, the broader market indices are more or less in a fair valuation zone,`` Lahiri said.

With excellent performance, the fund is poised to do well under the guidance of Lahiri, who has proved that he can deliver good returns. The fund has outperformed the category and the benchmark index, with a strategy to find value picks. Investors with long-term perspective who are looking to take exposure in good stocks can invest in this fund. Lahiri advises, ``Deciding how, when and where to invest one`s hard-earned money involves much more than watching the market move up or down on a daily basis. One should carefully draw out a systematic financial plan based on one`s unique circumstances, ability to invest, risk appetite, financial goals and investment horizon. Once you have a clear idea of your financial position, you can determine an appropriate asset allocation mix that will help you achieve your financial goals.``

Source :http://myiris.com