Contrary to the implication of “Flexicap” the fund has clung on to large caps through its inception. The fund maintains about a quarter of its investments in mid and small cap companies. A look at the portfolio of Flexicap shows that it is extensively diversified. The average holdings are quite small and the fund managers take concentrated bets on a handful of companies.
In the beginning the fund was a little more adventurous trying out new stocks, holding them for short time before booking profits. However, of late the fund gives the impression of playing it safe. There has not been much churn in the portfolio composition and the fund has begun holding on to a select list of stocks, occasionally building its position in them. The focus is definitely on companies that have a sustainable growth potential rather than investing in short term momentum bull runs.
One can also find a few contrarian bets here; the fund has been amongst the few to have bet heavily on the automobile sector. Of late there has been a build up in the basic engineering sector. But at the end of the day, there is a strong favour for diversified companies such as Larsen and Toubro, Grasim Industries and the like.
Flexicap should definitely enter your list of probable investment options, but don't get swayed by the large cap exposure. For all practical purposes it is a multi cap fund.
This article was originally published on August 17, 2007.
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