The fund aims to invest in stocks which offer high dividend yield. The fund's valuebased strategy is to gain from investing in fundamentally strong and free cash flow generating businesses. It has low volatility due to investment in high-yielding stocks. It tries to include stocks that yield dividend above that of the Nifty and stocks with liquidity.
The fund maintained a mix of stocks across market capitalisations, with a tilt to mid-caps. Since it focuses on mid- and small-cap stocks, small asset size is an advantage. With assets of less than `50 crore, the fund deftly moves in and out of stocks, sectors. It tilts towards a buy-and-hold strategy, which has helped the fund gain handsomely.
Half the portfolio accounts for financial services, technology and energy. The fund is well diversified with 34 stocks where allocation to a single one is not over four per cent. Micro Inks, NIIT Technologies, Bharati Shipyard and Oriental Bank of Commerce were some picks that helped deliver 105 per cent in 2009.
The fund has been improving each year. When compared with other dividend yield in the category, it made a mark in 2009 with a return of 105 per cent, the prime reason being the tilt towards smaller cap stocks, which had triggered the rally. Compared to the mid & small cap category, it has been a first or second quartile performer.
