At first blush, this would appear to be an aggressive offering. After all, that is what the perception of an opportunities fund is. One that takes bold sector and stock bets and swiftly moves between sectors wherever money is to be made. It would not be unusual to find a very concentrated portfolio in such a fund. However, that’s not what the Mirae Asset India Opportunities Fund is all about.
The fund manager here has complete flexibility to invest in stocks across sectors and market caps and move out of sectors which do not appear to have much upside to focus on those with more chances of an upswing. But he keeps himself well grounded, in what one may refer to as a conservative strategy. He rarely goes overboard with strong stock bets and refers to the fund as a flexi-cap one with a large-cap bias.
Surana maintains a core portfolio of 20-22 stocks with an average allocation of 54 per cent, the balance being opportunistic bets. In its short life, the fund has picked up a total of 156 stocks at various point in time and around 44 per cent of them were held for less than six months.
The fund was a top quartile performer in 2009 with a return of 109 per cent, way ahead of the category average (81%) and the benchmark - BSE 200 (88.50%).
A prime reason being that it was fully invested at the start of the rally in March. “We have also been underweight on few of the underperforming sectors like Real Estate, Construction and Capital Goods since inception i.e. for the last three years,” explains Surana.
But despite the impressive numbers, he did miss out substantially on the ride in auto stocks in 2009. The average exposure to Auto was 6.11 per cent in 2009; BSE Auto delivered 204 per cent that year.
Come 2010 and the fund once again stood tall with a return of 23.12 per cent, outperforming the category average and the benchmark. The trump card? “We had equal-weight to the Banking sector, with a bias towards private sector banks, and overweight on the Consumer sector with respect to the benchmark,” says Surana.
Although, the fund didn’t really impress with its performance during the three quarters of 2008, this year it has been able to curtail its fall better than it peers. From the start of the year till August 30, 2011, the fund lost 13.05per cent (category average: -15.71%).
Don’t go by the ‘opportunistic’ name. This is a fairly non-aggressive and well diversified offering which is a standout in its category.