Repositioning has brought about a complete turnaround in the fortunes of Principal Global Opportunities Fund (PGOF). The fund, which used to manage a paltry Rs 16 crore till August 2006, has seen its assets grow swiftly to Rs 442 crore by January 2007. This has been a result of a complete overhaul of the portfolio brought about after the regulations for overseas investing were relaxed.
Earlier, the fund used to invest in developed markets like USA and Japan. But since the third quarter of 2006, it changed focus to divert its asset towards emerging markets.
Rather than investing directly in stocks, it has become a feeder fund whereby it invests all its assets in PGIF Emerging Markets Equity Fund. The result is that its returns have got a huge boost. For the quarter ended December 2006, it delivered returns of 11.80 per cent, much more than the preceding four when it managed to cross 5 per cent in just one quarter.
This has led to an increased interest in the fund. Moreover, its expense ratio has also dropped sharply from over 2 per cent to just 0.33 per cent, since there is little scope for active management now as it merely re-routes it assets in another fund.
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