Last year, the fund delivered 70.2 per cent, while the category average was 61 per cent. The bias towards mid-cap stocks clearly worked in its favour. Till 2002, the fund tilted more towards large caps but when the rally started in 2003, it changed tack and gave in to the smaller fare. Having said that, the fund has been flexible in moving across capitalisation in line with market conditions.
The flexibility also extends to its changing composition. Its equity allocation has averaged around 69 per cent over the past year. The funds mandate permits the equity allocation to fluctuate between 50 and 75 per cent of its assets, and it has always stayed within that limit.
When Nishit Dholakia and Satyabrata Mohanty took over in June 2009, changes were apparent in the fund. A lot of shuffling took place in sector bets, while the number of stocks rose significantly to touch 60. The fund is fairly diversified and single-sector allocation has rarely crossed 16 per cent since 2006.
On the debt side, the portfolio has always been skewed towards bonds and debentures, as well as G-Secs. Over here, it will not be surprising to find aggressive maturity bets, should the need arise.
Over the past 14 years, this fund has underperformed its peers just three times. It rewards investors who hang in for the long term. Its five-year annualised return of 21 per cent (category average, 16 per cent) as on July 31 bears testimony to that.
