Smart play in tech space

This consistent category outperformer, thrashed the competition in 2007 to deliver 58 per cent (category average: 11.19 per cent). All this happened due to fund manager Apoorva Shah's radical moves. Faced with an appreciating rupee and fears of a US downturn, he reduced the allocation to software services export companies and started increasing the allocation to service and media stocks like Educomp Solution, Tata Teleservices and NDTV. The fund’s 82 per cent exposure to technology (January 2007) fell to 57 per cent (January 2008) while services (including media) were up at 32 per cent. Last year, it also steadily reduced its position in large caps and in March 2008, the mid- and small-cap exposure was at 72 per cent.
The moves paid off well and the corpus of the fund swelled by 437 per cent last year. Extremely commendable at a time when the technology sector was going through a bad phase. These inflows were probably the reason for the fund's high cash allocation. The fund manager does not follow the herd. When other funds in the category filled their portfolios with mid- and small-caps in 2004 and 2005, he refrained from doing so.
Neither does he have a problem in entering and exiting stocks. Infosys had a 16.48 per cent exposure in February 2007. He kept lowering it then, exited the stock altogether, but re-entered again. Now, it is the topmost holding at 9.39 per cent. The portfolio is not too concentrated with around 26 stocks on an average and it is rare that any stock will have a double-digit exposure. Those interested in the telecom, media, technology and technology-enabled sectors must give this fund serious consideration.

Fund Managers: Apoorva Shah and Aseem Gupta
Profile: Shah is a commerce graduate and PGDM from IIM, Ahmedabad while Gupta is a B. Tech from IIT, Kanpur and PGDM (ISB). Prior to joining DSPML AMC, Shah has worked with GPC India as portfolio advisor & head of products and with DSP Merrill Lynch. Whereas, Gupta has been with DSPML AMC from April 2006. Prior to joining, he had worked with DSPMLFM as manager, sales & distribution and from July 2003 to December 2003.