Cherry Picking
Being contrarian in nature to focus on out-of favour stocks, the fund had a very low exposure to technology in 1999. So no great returns that year and the next.
But, it fell by just 5.52 per cent in 2001 (category average: -19 per cent). The next year it gave a return of 32.74 per cent (category average: 19.43 per cent). The year 2003 saw it dip from the top quartile position when it gave a return just above the category average. In 2004, it shot to fame as the second best-performing fund with a 64.49 per cent return (category average: 25.84 per cent). In 2005, it was the third best-performing fund with a 71 per cent return (category average: 46.70 per cent).
The fund has a large-cap orientation. In 2003, large-caps constituted 72 per cent of the portfolio which decreased to an average of 46 per cent in two years. This year, large-caps on an average occupied 57.80 per cent of the portfolio.
The new fund manager in mid-2005 has focused on toning down the aggression.
It is extremely diversified across 48 stocks (as on November 30, 2006) with the top three sectors accounting for just around 36 per cent of the total allocation. The topmost holding -State Bank of India - accounts for 4.78 per cent while the top three stocks constitute 13.71 per cent of the portfolio. This is a significant shift from its earlier aggressive stance. At one time some stocks held a significant portion of the portfolio: Hindustan Petroleum (17.22 per cent), Container Corporation of India (12.02 per cent), ACC (11.89 per cent).
As on November 30, 2006, the topmost sector - construction - accounted for 14.90 per cent of the portfolio.
This article was originally published on January 01, 2007.
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