It's safe to say that this fund has historically been an above average performer. Yet, the fact that it does not turn heads is also an accurate observation. But lately, the fund manager has proved that he has the ability to do so. In the last bull run (June 15, 2006 - January 8, 2008), the fund managed a top quartile performance with an absolute return of 55.85 per cent. And in the bearish phase that immediately followed, it has managed to fall less than the category average.
This is a fund that plays it safe. It, by and large, sticks to its equity allocation as stated in the mandate but there have been occasions where it has dipped to less than 65 per cent, but never more than 75 per cent. It has always maintained a bias towards large caps barring 2007 when it lowered the exposure to large caps to take part in the mid-cap rally. From around half (52.28%) of the portfolio dedicated to large caps in January 2007, it brought it down to nearly 39 per cent in September 2007. But investors don't have to worry, as seeing the adverse market conditions the fund manager again moved up the large-cap exposure to account for nearly 61 per cent at present.
It stays well balanced across sectors and casts its lot with defensives. While healthcare and consumer non-durables are prominent, infotech has always been its favourite. The fund has maintained an exposure to Infosys and SIP Technologies (unlisted) since its launch. The diversification also extends to the number of stocks. It has averaged at around 78 in recent times with the top five holdings concentration being way below the category average. Since January 2008, its top five stocks hardly accounted for around 15 per cent of the total corpus whereas the category average was almost 24 per cent.
On the debt side, the fund employs all debt instruments available in the debt market. Unlike its peers, it has refrained from extensively investing in debenture and commercial paper. Rather, it invests in floating rate papers of all kinds and government bonds. This way it is protected on the credit as well as interest rate side.
You will be well taken care of here if you don't expect trailblazing returns. But then one should not look for such returns in a balanced fund.