This predominantly mid-cap offering moves in and out of stocks but has been unable to beat its own benchmark - the BSE CG index. Its return was 56.15 (2006) and 90.39 per cent (2007) as compared with the benchmark's 56.43 and 117 per cent respectively. And when the benchmark fell by 28.49 per cent, the fund fell by 30.86 per cent (January 8 - March 28, 2008).
Despite the aim being to invest in industries which are directly involved in the production of capital goods or are direct beneficiaries of its growth, stocks like Aegis Logistics, Educomp Solutions, Infosys, Taj G V K Hotels & Resorts and Spice Jet also appear here.
Though the number of stocks is still around 60, the fund has diluted its concentration. The top five holdings are now 23 per cent, down from the average 31 per cent in 2007. The top three sectors account for just 43 per cent (down from 60 per cent) and the top-most sector Basic-Engineering now stands at 25.63 per cent (it touched 41 per cent in 2007).
In March 2008, the cash allocation shot up to 30 per cent, while the large-cap allocation dropped to 33.73 per cent. This was the result of the fund manager offloading stocks in the Basic-Engineering, Diversified and Metals space.
Fund manager Srividhya Rajesh has held on to construction stocks like IVRCL Infrastructure, Punj Lloyd, Patel Engineering and McNally Bharat Engineering and has actually increased exposure to some of them as compared to last year. To cash in on rising commodity prices, she has moved into stocks which are predominantly into extraction and not consumers of natural resources. So stocks like Shiv Vani Oil & Gas Exploration, Asian Oil Field Services, NALCO, Sarda Energy & Minerals, and Tata Power have entered the portfolio with reduced holdings in companies like ABB and BHEL.