Launched in October 2007, this fund faced tough times in the initial years before resurrecting its performance. This is a focused fund and invests in select sectors. It follows a set of self-imposed guidelines. It does not invest in less than 15 stocks or more than 30 stocks; investments are made in a minimum of five sectors with the upper limit being 10, and lastly, not less than 2 per cent of the exposure is made to a single stock (excluding IPO investments). This approach allows the fund manager to deploy more funds in the sectors that he finds most attractive, and that, too, without compromising on a reasonable level of diversification.
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The fund manager sticks to these guidelines to ensure discipline thereby aiding performance. A leeway, though, exists for the fund manager which allows managing the asset allocation through increasing cash or hedging. The allocation to equity is in the 70-100 per cent range, with net exposure after hedging (if any) maintained in the 50-100 per cent range. Although the fund can invest across market capitalisation, the fund manager has demonstrated a large-cap bias.
A small sized fund with assets of Rs.53 crore as on March 31, 2015, its performance has improved this year against last year. The concentrated approach of this fund has resulted in its above-average returns, but that comes with an element of risk. With the economy poised for resurgence, this fund has gained from the momentum and large-cap allocation that it maintains.
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A top performer in recent years, it has come a long way from its not-so-impressive start. It has done better than its benchmark S&P BSE 100 in the past 1-, 3- and 5-year returns. However, its performance pales compared to its peers because of its insipid performance in its early years when it held high cash reserves. The fund is suitable for those investors who have a slightly higher risk appetite.
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