What makes this fund interesting is that it has been around for years. A look at the long-term performance puts the fund in a very good light. It has long been among the first choices when it comes to a mid-cap fund and it has seen its assets soar from just Rs 33 crore by the end of 2000 to over Rs 1,700 crore currently.
In 2001 it was declared the hottest fund. This was no mean feat since the previous year it took a hammering. In 2000, it lost 44.88 per cent while the Nifty was down by just 14.65 per cent.
But since then, it has landed in the top quartile of the category in each calendar year. It's trailing five-year return as of September 12, 2006 was 61.95 per cent, much higher than the average return of diversified equity funds (42.26 per cent) and the Sensex (30.91 per cent).
But if you look at the near-term performance over the last one year, the results are disappointing as it finds a place in the bottom quartile. Over the past one-year, the fund has shown a tendency of rising less than the average peers when the markets went up and falling relatively lesser when markets are in red.
Even if the performance has not been too good in the recent past, don't be quick to shun this fund. If you are looking at a mid-cap offering, you should consider this fund. A big positive is the continuity of fund manager KN Siva Subramanian, one of the finest brains in the Indian fund industry, who has been at the helm since launch.
The fund manager subscribes to the buy-and-hold strategy. He has faithfully stuck with certain stocks like Torrent Pharmaceuticals, Cummins India and Raymond which have worked in his favour. Currently, the fund holds a portfolio of 42 stocks, with significant investments in Aditya Birla Nuvo (8.24 per cent) and JP Associates (7.43 per cent).
While concerns over its size have now started to emerge, but there are reasons to stay invested.
This article was originally published on October 18, 2006.
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