This offering is best viewed as a low-risk way to participate in stock market rallies without having to endure the depths of the bear market plunges.
Though it rallied impressively in the first two years of its existence, it has toned down to become a category average player. However, in the bear hug of 2008, it did safeguard investors' money.
In 2006, the fund underwent a number of fund manager changes which got reflected in the investment style. The portfolio began to get leaner and took on a more growth-oriented tilt. From around 60 stocks at the start of 2006, it went down to 30 by the end of that year. The large-cap bias got all the more distinct along with a rise in cash allocations.
The fund has maintained a large-cap allocation of more than 80 per cent since May 2006, irrespective of the state the markets were in. Consequently, its returns were held back in rising markets while it shot up to the lights when the markets tanked. In 2006 and 2007 it emerged as an average performer. In the recent bull phase (09/03/2009-30/06/2009), it could not match up to the category's 71 per cent returns, delivering 50 per cent returns.
But in the market crash of 2008, it shed a lesser 48 per cent (category: -55 per cent). In the first quarter of 2009 also, it proved its merit by giving a positive return of 0.79 per cent while the category was in red with negative returns of 3 per cent.
The fund is known for its considerable stock churning. This trait is a natural outcome of a fund following the top-down approach before taking stock calls to benefit from market opportunities.
All in all, this fund is one of the better, and more conservative, bets in this category.
This article was originally published on July 29, 2009.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
