It's tough to nail down this one's style.
Consider this. The fund invests aggressively in small companies, but ensures that a larger part of its portfolio is invested in relatively bigger mid-caps. At Rs 4,051 crore, the weighted average market capitalisation of its portfolio is pretty high.
The fund manager does churn the portfolio considerably and frequently tries out new stocks. Yet, stocks that are held for a period of 30 odd months at a stretch do make an appearance.
He brazenly sticks to his convictions and goes against the herd, as suggested by some of his sector bets. Yet he walks down the path of high diversification. His portfolio now has 65 stocks, up from the 40-45 range. None of the stocks account for more than 3 per cent of the assets.
But going by the fine numbers he has been putting in, there's reason to think he knows what he is doing. Over the last three years, Birla Mid Cap has delivered an annualised return of 53 per cent (as on October 11, 2007) to command a place in the top quartile of the category. It has never fallen below a four-star rating in its 24-month rating history. Being quite small vis-à-vis other mid-cap funds, it is a nimble offering with just Rs 493 crore. The increase in corpus over the past 12 months (from Rs 159 crore) is probably the reason for the portfolio diversification.
In a nutshell, the fund does not display characteristics of being highly aggressive, especially given the amount of diversification and the kind of mid-caps it invests in. This is probably as safe as you can get with a mid-cap fund.
This article was originally published on December 24, 2007.
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