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Calculated Risk-Taker

This monthly income plan has one of the best risk-reward profile. An investor with an appetite for volatility would like this fund

Being one of the most aggressive funds, FT India MIP is also one of the most prolific funds in its category. The fund was launched in September 2000 under the umbrella of erstwhile Kothari Pioneer later known as Pioneer ITI, which was finally taken over by Franklin Templeton in August 2002. During the launch the fund started on a small scale managing assets worth around Rs 43 crore in November 2000. Later after being rechristened as FT India MIP in 2002 the fund achieved a maximum size of Rs 1,984 crore in May 2004.

The fund now stands at the top being the largest fund in the category with an AUM of Rs 790 crore as on May 31, 2005.

With exception of May 2004, the fund has proved to be one of the highest yielding funds in the category. This is because the fund has managed the volatile phases well enough by actively managing its equity exposure and average maturity of its debt securities. Taking a look at its scorecard, one can notice the fact its three-year (12.80 per cent annualised) trailing returns is clearly the best in category.

In its initial days the fund had managed to reap heavy profits by taking longer interest calls. For instance, between January 2001 and March 2004, when yields were sliding, its average maturity of debt holdings on an average was 3.97 years.

However in the current scenario the fund has adjusted its average maturity by bringing it down to 2.61 years as on May 31, 2005. Also, the fund has consciously improved the quality of debt by maintaining more than 61 per cent of its net assets in AAA securities as on May 31, 2005 as compared to a corresponding figure of nearly 35 per cent as on March 31, 2004.

On the equity side, it has maintained an exposure averaging around 18 per cent through the year ending March 31, 2005. During the same period the category average for equity exposure was around 12 per cent.

The fund has always maintained a concentration of large-caps in its equity portfolio, even within that, the fund has distributed and diversified its portfolio over 30-35 large cap growth stocks across various sectors.

An investor with an appetite for volatility would like this fund.