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Leading from Front

Not only has this top-rated fund performed well during good times, but it has also shown resilience while protecting the downside. This makes it one of the choicest tax-planning funds

HDFC Tax Saver continues to shine with a five star rating. The top category performer has been consistent since November 2004 as it has been assigned a 5-star rating.

The fund's performance can be gauged from the fact that its rating never went below four stars in its rating history of 89 months. The fund has always shown resilience while protecting the downside.

It delivered returns of 34.12 per cent in 2006 to outperform the category return of 30.06 per cent. And this has been the trend for the past so many years. In fact the three calendar years before 2006 were even better, when it beat an average peer by a comfortable margin of 11 per cent or more.

Throughout 2006, the fund has limited its equity investment to a universe of 31-35 stocks. The large-caps dominate the portfolio with a 57 per cent allocation. But it has been adding quite a few mid and small caps and slightly moving away from large caps.

The fund is currently betting big upon auto sector, which constitutes over 18 per cent of its portfolio. Auto giants- Tata Motors and Maruti are among the fund's major holdings. Basic/ engineering and technology stocks are the other prominent holdings.

Textiles is another sector which the fund finds promising and has increased its exposure here, while it has cut exposure to the metals sector.