This is a stable, large-cap offering that has consistently yielded decent returns.
Don't get misled by the name. This is neither an index fund nor is it limited by the constituents of the Sensex. While the number of stocks generally fluctuates between 30 and 39, there have been instances where it has fallen to less than 30.
While the natural outcome is concentration of stock holdings, the risk is mitigated with the large-cap tilt. Moreover, exposure to a single sector rarely exceeds 25 per cent of the portfolio.
The fund debuted in style only to disappoint in the following two years. It picked up in 2002 and has some impressive annual performances. More recently, it ran into rough weather in 2009 after a very average performance in 2008. What's interesting is that its total allocation to FMCG and Healthcare, both defensives, were higher in 2009 than the previous year.
Not an aggressive churner, stocks like Larsen & Toubro, Reliance Industries Ltd, Infosys Technologies, BHEL, ITC and State Bank of India have been in the portfolio for a considerable length of time. Though there have been intermittent exits in some of the stocks, they have been there with reasonable continuity.
Despite occassional hiccups, its 5-year annualised return of 23 per cent as on January 31, 2010, has made investors happy (category average: 20%).
This article was originally published on April 13, 2010.
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