This scheme follows a bottomup investment style, by identifying companies with a strong competitive position, in good businesses with quality managements.
This seven-year fund underwent a makeover in 2007 and has not looked back since. In its earlier days, its erratic portfolio had a distinctive mid-cap tilt. Since 2007, the fund began to take adistinctive large-cap bias and the portfolio began to stay consistently diversified. Consequently, it has beaten its peers in market downturns and upturns. At the end of 2010, the threeyear annualised return was 4.6 per cent, compared to the negative returns of its benchmark, the BSE 200.
A great believer of the consumption story, Shah added FMCG stocks to the portfolio last July, a sector missing till then, while reducing exposure to financial services. While stocks like Bharti Airtel, HDFC Bank, BPCL and BHEL have been consistently part of Shah's portfolio, the manager tends to book profits in stocks that are fancied by the market during rallies. Evidence to this fact is that its portfolio turnover and pruning are prevalent only in a select set of stocks that witnessed sharp market interest at that point in time.
The fund primarily invests in bigger stocks and, to prop up its returns, will opt for mid- and small-cap stocks to a maximum exposure of around 25 per cent of the assets. Besides delivering well during market upturns, the fund has also proved its worth during market meltdowns.