Its launch in 2004 ushered in this new breed of thematic funds. And its consequent performance more than proved the merit of the theme. In 2005, it beat the only other infrastructure fund — DSPML T.I.G.E.R. But in 2006, it beat all diversified equity funds and infrastructure ones with a return of 61.48 per cent. Last year, it delivered 72 per cent but was nowhere near the top.
Though spread across stocks of different market caps, it was in March 2007 that it began to tilt towards large caps. Over the past 12 months, large-caps have averaged at around 61 per cent of the portfolio. Reliance Industries, the current top-most holding at almost 7 per cent, has been around since inception. ACC, Grasim Industries, Indian Oil Corporation, ONGC and Shree Cement are other such stocks too.
Besides tilting towards large caps, fund manager Sanjay Dongre has also been playing it safe by increasing the number of stocks. Over the last six months, the number of stocks has moved from 41 to 49 and the cash allocation has simultaneously increased from 2.49 per cent to almost 18 per cent.
Unlike other infrastructure funds, the fund does not invest in banks and limits its Financial Services exposure to IDFC. It is a hard-core infrastructure fund that focuses on Energy, Basic-Engineering, Construction, Metals and Telecom. In sectors like automobiles, consumer durables and non-durables, the fund manager selectively picked up stocks only to take advantage of a temporary upswing. Cases in point are Bajaj Hindustan (August ‘05 - October ‘06), Ballarpur Industries (April ‘04 - October ‘04), Ceat (May ‘06 - April ‘07) and Bajaj Electrical (February ‘05 - October ‘05). Though bullish on Construction last year, the fund's exposure to this sector has been gradually decreasing from 15 per cent in December ‘07 to 11.59 per cent in May ‘08.