DSPML Technology fund will be an open-ended fund which intends to invest in technology and technology-related companies.

The software sector has attracted a lot of technology-specific funds. Alliance Mutual Fund which closed its initial subscription had collected Rs 400 crore in its Millennium Fund. The technology funds of Prudential ICICI and Birla Mutual fund are open for investments.

Almost every mutual fund wants to attract retail investors whose appetite for software stocks is growing. For retail investors ,the mutual fund route is the best option to get hold of software stocks, most of which are out of their reach.

Kotak Mahindra Mutual Fund is alsofloating a technology fund, while it is learnt that JM Asset Management is planning two funds in this sector. JM is yet to finalise the details of the scheme.

Kothari Pioneer Mutual Fund, the first one to launch an IT fund, recently declared a dividend of Rs 6 and a 1:1 bonus to attract retail investors. Since dividends declared by open-ended funds are tax free, UTI has also declared a dividend of Rs 2 per unit in its software fund.

IT funds in India have given exceptional returns to investors in recent months. And fund managers feel that there is still enough opportunity in this industry. At least 30 software companies have declared their third quarter results, showing an average growth of 72 per cent in sales and an 83 per cent jump in bottomlines. Analysts feel that this growth rate was achieved during the period of Y2K-related fears, when clients were not spending much on IT-related costs. The future looks very bright for the industry, they feel.

The investment strategy for mutual funds tapping thissector has moved beyond software sector and encompassed related areas such as those with technological advancements in pharma, telecom, media and life sciences.DSP ML Opportunities Fund will focus on investing in companies that have concentrated on building price setting franchises and supported by mass market and servicing stable consumer groups including FMCG, Pharma and related industries. The fund will concentrate on tapping emerging trends to deliver value to investors.