One of the best performing arbitrage funds, it was a category topper in 2008 with a return of 10.60 per cent. Right from January 2008 till March 2009, the fund has outperformed the category average in 12 months. And, the average outperformance has always been higher (average of 22bps) than that of the underperformance (4bps).
That is definitely a reward for its bold stance that often goes against the general market trend. Since September 2007 there has been constant reduction in its equity allocation despite being more or less hedged at all times. This cautious move saved it from the bloodbath in the equity market and enabled it to participate in the debt rally of 2008.
At the end of September 2007, the fund had an exposure of 32.37 per cent to financial sector which dropped in December 2007 (19.36%) and January 2008 (5.19%). Energy dropped dramatically between December 2007 (25.89%) and January 2008 (3.23%). Currently it is only invested in energy (5.76%), finance (1.54%) and technology (0.42%).
The icing on the cake: A low expense ratio of just 0.75 per cent.