This fund is one of the sturdiest one. After an impressive show in 2005, it delivered a pretty muted performance in 2006 and 2007. But that also brought to the fore the fund manager, Prashant Jain's, inherent strength, that of sticking by his convictions. So, even if it means being temporarily punished, he will stick to good quality businesses, remain diversified and be wary of richly valued investments.
If investors fretted over and critics scorned the fund's performance in 2007, Jain turned the tables on them eventually. Known to always provide decent downside protection capabilities in the past, it was the same in 2008. Though its fall of 50 per cent was only marginally lower than that of the category average (53 per cent), Jain accomplished this without plunging into large-caps or resorting to aggressive cash calls.
And, being fully invested certainly helped when the markets picked up in March 2009. Last year, the return of 106 per cent put it way ahead of the category average of multi-cap funds and its benchmark (S&P CNX 500) by 24 per cent and 17 per cent, respectively.
Over the past few years, the fund has preferred bank stocks over cyclicals like metals, as return on equity/growth are better on the one hand and valuations cheaper on the other for the former. This hurt performance in 2008, as banks under-performed due to global banks being in stress and the same has helped in 2009 when banks did well. The high mid- and small-cap exposure also helped, though Jain has booked profits and is now tilting towards large caps.
The fund's size has not dampened performance, though it has led to a much more diversified offering. With less than 20 stocks in the portfolio till 2003, it has risen to around 60.
