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Consistent category-beating returns through a concentrated portfolio is what Zurich India Equity has to offer. Diversification is also included, which makes this fund a worthwhile candidate for any equity portfolio.

Zipping in and out of performing sectors has been a way of life for Zurich India Equity Fund (ZIEF). While this has proved injurious for the health of many a funds, this fund has been amply rewarded. The bounty—six continuous years of outperformance against its benchmark - the S&P 500. More importantly, in five of these six years, it has found a place in the first quartile of its category.

Examples of ZIEF's rapid sectoral strides abound. After 9/11, the fund's IT exposure had gone up from 3.8 per cent in September-end to 27.7 per cent by December-end. When oil stocks were booming in early 2002, the fund latched on to HPCL, thus doubling its energy exposure within a single month. More recently, ZIEF increased exposure to IT stocks from 16 per cent in November 2002 to 23 per cent in December 2002, which has since been reduced to 16 per cent again in January 2003. This was achieved by quickly entering and exiting Wipro and Digital Globalsoft. While ZIEF has been extremely nimble, the one thing that has helped it protect returns when its calls go wrong has been diversification. Therefore, though the fund lost significantly when it dumped HPCL in September 2002, it still managed to end the year in the first quartile of its category. Another benefit of this diversified approach has been ZIEF's lower volatility.

Now the fund has jumped on to the PSU bank stocks bandwagon. After more than two years of having no exposure to finance stocks, the fund took a 6.1 per cent exposure to State Bank of India in June 2002. By November, the exposure to this sector was doubled, and in December it had touched 18 per cent, when the fund purchased stocks of Punjab National Bank and Bank of Baroda. Finance is now the funds leading sectoral allocation

Correct sector calls have also helped ZIE both on the up side and downside. The most recent example has been its strongly underweight stance in IT (9.3 per cent of portrfolio as on March 31, 2003) which helped it stay afloat as Infosys results shredded the markets.

ZIEF's performance has gained recognition last year. Between March and September 2002, the funds unit capital doubled to Rs 156 crore.

Zurich India Equity has successfully managed the risks of a concentrated portfolio. If you want worry-free investing, then make this fund the core of your equity fund portfolio.