This erstwhile Alliance fund seems to be regaining its days of glory but without the brashness of its youth. After a dazzling performance of 280 per cent (1999) and a miserable two years (2001, 2002), it now seems to be back on track.
Like a chameleon, this one constantly changed its colours. In its initial years, it was a dangerously focused offering with extreme concentration in few technology stocks, followed by a stream of small holdings. It paid off handsomely before falling in the doldrums. What followed (since 2003) were smaller portfolios of 30-35 stocks with the top five holdings consuming 35 per cent of the assets. This brought in the much needed sectoral diversity.
A good move at this time was the identification of the mid-cap rally early enough.
In September 2005 the fund was acquired by Birla Sun Life. The natural consequence was a significant toning down of the aggression. The number of stocks gradually rose to around 50 and the top 5 holdings now add up to just around 20 per cent of the assets, which remain evenly spread across large- and mid-caps. What's more, the fund manager does not hesitate to shift a considerable part of assets to cash at the first sign of trouble.
Despite this ongoing transformation, the fund has evolved to be a steady, well-diversified, multi-cap offering that has consistently beaten the category average. With erratic performances and concentrated portfolios being a trend of the past, this fund is suitable to be among the core holdings of your portfolio.
This article was originally published on November 28, 2007.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
