In its history of around 13 years, the fund has some good, bad as well as average annual performances. It became open-end in 2003 but Anoop Bhaskar took over the fund in April 2007 and earned it a respectable place in the category.
Bhaskar made few sector changes which did not show glaring results in terms of performance that year but since then the fund has outperformed the annual category average. In the market downturn of 2008, the fall was more or less in line with the category average at -58 per cent (category average: -60%). Though Bhaskar resorted to cash and debt, he never went overboard and maintained an average 11 per cent exposure to those asset classes that year.
In 2009, it put its best foot forward and found itself in the top 10 by way of performance. “Diligent stock picking and timely exit from some of the overvalued position as the markets started moving into the higher band,” is the reason Bhaskar gives. “Some of the sector calls in Fertilizers and Pesticides, Automobile and Industrial manufacturing contributed to fund’s performance,” he adds. Stocks like Crompton Greaves, Clariant Chemicals, Kalyani Steels and Gujarat Mineral Development Corporation delivered impressively in 2009 with each giving returns over 200 per cent that year.
In 2010 too it was a top quartile performer. In 2011, Bhaskar restricted the fall by taking substantial bets in FMCG and Healthcare and increasing the large-cap allocation; it has averaged around 34 per cent (till October 31, 2011) while that of the category was 22 per cent. “The large-cap allocation has gone up as the market has run up sharply on the valuation side. Some of the positions have been built on account of relative valuation and the sector’s long term outlook,” says Bhaskar.
Bhaskar looks for stocks that are relatively undervalued to their expected long-term performance. Factors like company’s financial structure, its competitive position in the market and management’s commitment to increasing the shareholder’s value are considered.
The fund holds majority of stocks for long and Pidilite Industries, Clariant Chemicals (India), Blue Dart Express, La Opala R G and Navneet Publications (India) have been in the portfolio almost since inception.
The fund manager probably tries to mitigate the risk with a highly diversified portfolio. From 40 stocks (April 2009), the portfolio has around 82 at present. He rarely takes aggressive sector bets too.
This article was originally published on January 12, 2012.
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