Despite a fabulous performance in 2010, the fund generally does not excite during bull runs but will not crumble like pack of cards either. Being a bottom-up stock picker, Kothari won’t necessarily buy into a stock even if it is having a great run. “I construct my portfolio very much stock-by-stock basis and look for good fundamentals, scalable businesses at right valuations,” he says. Though not restricted by market cap, the large-cap bias and well diversified portfolio give the impression that he errs on the side of caution. Apart from RIL, allocation to a single stock has rarely exceeded 6 per cent and numerous stocks have an exposure of less than 1 per cent. When smaller stocks rally, this large-cap dominated portfolio could get left out. Also, should Financial Services’ stocks get beaten down (it has a strong bent to this sector), this fund could lag behind its peers.
This article was originally published on April 19, 2012.
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