Years 2000 and 2001 stand out in the long performance record of the fund. During 2000, the fund lost only 2.79 per cent, while the category was down a massive 24.82 per cent, which enabled the fund to finish third in the category. It reproduced its fantastic performance in 2001 as well, to rank in the top quartile. Though the fund had huge investments in tech stocks, an exposure to FMCG and diversified stocks like Reliance saved the fund. Year 2002 turned out to be quite average but the fund was back in the top quartile in 2003. MICO turned out to be a multi-bagger for the fund. BHEL, BPCL and Grasim were some of the other picks that proved quite beneficial. Since the start of 2004, the fortunes of the fund have turned sour. At a time when mid-caps have been firing from all cylinders, the fund has stuck to large-caps, which has hit its returns badly as has been the case with Franklin India Bluechip, another large-cap fund from the same family. An increased exposure to consumer non-durables backfired for the fund. In 2005, the fund lags the category by far, delivering year-to-date returns of 22.03 per cent against the category's 32.28 per cent as on November 11, 2005.
While the fund invests predominantly in large-cap stocks, it does not hesitate to take concentrated bets in its top holdings. This is where the fund looks very aggressive. As per the August 2005 portfolio, the top three holdings alone accounted for close to a quarter of the portfolio. In recent times, an exposure to sectors like diversified, energy and financial services has gone up, while the share of services and automobiles has come down. Unlike many other funds, allocation to energy stocks has also been on the rise.
This article was originally published on January 13, 2006.
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