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IDFC Imperial Equity Plan A

The commendable resilience displayed during the market downturn

The commendable resilience displayed during the market downturn of 2008 shoved it into the limelight. That year, amongst the entire equity diversified category of 193 funds, it grabbed the third spot by shedding just 41.82 per cent.

In its short history, the fund has displayed great downside protection abilities. But does that justify an investment? Its claim to fame is the sturdiness it displays when the market tanks. How does it perform when the reverse takes place? It certainly rises, but does not outshine its peers. But this is exactly what the fund manager has set out to do. The downside protection and more subdued performance in a rising market are simply a reflection of the fundamental characteristic of the fund.

When the breadth of the market does well with stocks outside the universe of the top 70, Imperial Equity tends to lag. So one must look at the portfolio over a cycle since beta tends to be 1 on the way up and cut on the way down. The 3-year and 2-year performances are ahead of the category average.

A small and compact portfolio of very liquid names allows Andrade to get by with a fair amount of churning, on the stock and sector level. He also actively trades in derivatives. Neither does he shirk from taking aggressive sector bets or going against the market grain.

A high quality portfolio with excellent downside protection capabilities are the mark of this fund. It targets the first-time equity investor or cautious ones seeking the assurance of a completely recognizable portfolio.