This fund deserves to manage more money than it does at present. A well-diversified portfolio spread over 25 to 30 stocks, evenly balanced over large-, mid- and small-cap stocks, low volatility and consistent returns make it one of the best choices in the category.
Barring a marginal underperformance in 2001, the fund has always delivered superior returns than an average peer. In the five- and three-year period ending January 9, 2006, the fund had best returns. Since 2002, the fund has always been one of the best three in the category.
In 2005, when all the category outperformers earned their returns through a portfolio heavily skewed towards mid- and small-cap stocks, this fund scored a win by sticking to a large-cap tilted, well-diversified portfolio. This fund's 54.20 per cent return and second rank in the category looks much more convincing than some of the aggressive return machines in the category.
The fund has maintained this consistency despite a troubled start. Like many tech funds, this fund too was launched at the peak of the tech boom in April 2000. It posted a loss of 36 per cent in 2001 but hasn't looked back since then. 2002 and 2003 were its golden years, which enabled it to make up to investors for the initial losses.
The defining feature of this fund has been diversification. It has consistently maintained a portfolio of around 25-30 stocks. Except for Infosys, rarely anything else has accounted for more than 10 per cent of the fund's total assets. Another important feature of the fund is its love for buy and hold strategy. For instance, the fund has been holding Bharat Electronics, HCL Technologies, Infosys, Mphasis BFL and Satyam Computers since launch. It's also the second least volatile fund in the category.
The only concern here is a change in fund manager. Anup Maheshwari, under whom the fund has flourished, has left the AMC and the fund is in new hands, so investors need to be a little watchful for some time and see if the new manager can continue the good work.