This is one fund that has evolved over the years. From erratic performances and concentrated portfolios, it is now a more stable product.
It shot to fame in 1999 with a dazzling performance of 280 per cent. Investors then had to deal with two terrible years (2001 and 2002) when it underperformed the category average by a wide margin. But the fund pulled up socks and in the 15 quarters since 2003, the fund underperformed in just three.
It also worked at toning down its dangerously concentrated portfolio. The fund manager would bet heavily on some sectors and try to nullify the risk by investing in many stocks.
The fund had 46 stocks in its portfolio as on December 31, 2006 and the top three sectors occupied around 40 per cent of its portfolio.
The fund manager gets in and out of stocks and does not really buy to hold. Just a handful - Siemens, Pantaloon Retail, Tata Motors, Bharti Airtel, Maestros Mediline Systems, United Breweries (Holdings) Ltd, United Breweries - have consistently been with the fund for years. Trent, first appeared in the June 1999 portfolio, was sold after some months and bought again in April 2002. Cadila Healthcare was picked up in 2000, sold within a year and bought in January 2004.
Like his philosophy with stocks, the fund manager does not favour any particular market cap. Large-cap allocation was high in 2001 (79 per cent), kept decreasing till 2004 (37.58 per cent) and moved up in 2005 (54.68 per cent). Last year it has decreased (from 66 per cent in January to 46.97 per cent in December).
Last year, the fund seemed to be doing well with a return of 42.84 per cent (category average: 34.69 per cent). Its one-year, two-year, three-year and five-year returns were all ahead of the category average.
This article was originally published on February 01, 2007.
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