While getting liberal with its value investing philosophy, the fund has not strayed away from its diversified blue-chip portfolio. The results have just started trickling for the fund.
Guided by value investing and bottom up stock picking strategy, the fund started scouting for companies that are selling at the greatest discount to their five-year potential. While its held on to blue chip diversified cyclicals stocks, even this could not help the fund stem the slide in the bear grip till 1998.
Under pressure from its sustained under-performance and peer pressure, TIGF's re-visited its investment strategy. Changing tack in late 1998 when the fund started taking exposure in intangible / knowledge based industries - it took exposure to Satyam Computers and Ranbaxy. However, significant exposure to technology counters came late in 1999 when the rally has started, and the allocation averaged at a third of the corpus in 2000. The rest of the portfolio is well spread across cyclicals such as diversified industry groups, automobile and energy stocks. Interestingly, while the fund spread to growth stocks in technology, it held only a sprinkling of pharma and FMCG stocks. The tech exposure notwithstanding the fund still holds large cap portfolio, which holds a blend of growth and value.
Clearly, getting its act together late in the day, the funds returns since launch looks pretty dull. But the re-orientation since 1998 has seen the fund post a splendid two-year performance. While the fund lagged its aggressive peers in 1999, its day under the sun came in 2000 - when the fund held ground with a diversified portfolio.
If the fund continues with its rethought ideology, it could well end up an interesting case for a core holding.