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Completely Conventional

Tata Pure Equity, barring an initial hiccup, has created a good record...

Barring the very first year, it has not displayed a top quartile performance. But out of the ten calendar years that it has been in existence, it managed to beat the category average in seven. In the 2008 market meltdown, it managed a fall less than the category average.

Despite the fund's investment mandate, it has not stopped the fund manager from dabbling in mid-caps.

M. Venugopal, who took over in February 2005, ensured that the number of stocks averaged 45. In October 2008, another fund manager- Mahendra Jajoo took charge of the fund. During the year, the fund's portfolio began to get a concentrated stock holding and at the same time it increased its cash and debt allocations. This cushioned its losses in the downturn as it shed 49.21 per cent while the category lost 55.06 per cent.

In the first quarter of 2009, the fund managed to pull through with an average fall. But in the rally that followed (09/03/2009-30/06/2009), it could not equal its category despite having a considerable mid-cap exposure. It delivered 61 per cent while the category returned 71 per cent.

The fund adopts a buy-and-hold strategy, but it does periodically book profits when price targets have been met. And, as in the case of SAIL, State Bank of India, Siemens and Thermax, it re-entered the stock afresh after offloading it completely.

There are times when the fund does exceedingly well, as in 2003 thanks to its smart sector bets. But the nature of this fund ensures that it generally does not deliver astounding returns during rising markets, but it protects the downside in crashes.

Conservative investors looking for a large-cap tilt will do well here.