This relatively small-sized equity-linked savings scheme has shown the ability to identify trends and make swift moves to generate good returns. Its annualised five-year return of over 52 per cent ranks it at the fifth place out of 19 funds.
However, the fund had not been a category-beater since inception. After its launch in 1999, the next two years turned out to be quite unnerving for its investors. With more than half of its assets committed to tech stocks, the fund lost heavily in 2000 and 2001.
But by the end of 2001, its fortunes started to change. Good sector calls, coupled with the ability to sense the opportunities and make apt moves have helped the fund emerge as a good tax-planning fund. For example, its bet upon banking and technology stocks during the last two quarters of 2002 paid rich dividends.
2003 was exceptional as the fund returned 161 per cent. A quick dash in select chemicals, energy and metal stocks helped the fund post superb performance in the second quarter of 2003, and propelled it to the top of the category. The fund again displayed its ability to sense an opportunity at the right time during the third quarter of 2006. The fund manager timed his entry in the banking stocks to perfection, and benefited immensely.
The fund manager prefers to hold a small portfolio of around 35 stocks in which he invests with conviction. Almost each of these holdings accounts for over 1 per cent of the portfolio and therefore has a significant impact on fund's returns.
Currently, the fund is going against the herd. Its top two sectors- services and financial services are not even among the top five of the category. Moreover, technology sector is one of the top holdings of other funds, but accounts for just over 7 per cent of this fund's portfolio.
This article was originally published on December 04, 2006.
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