This consistent category outperformer, thrashed the competition in 2007 to deliver 58 per cent (category average: 11.19 per cent). All a result of fund manager Apoorva Shah's radical moves. Faced with an appreciating rupee and fears of a U.S. downturn, he reduced the allocation to software service export companies and began to increase it 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 this 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 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.