This fund maintains a quality portfolio of large-cap orientation. The fund manager adheres to a bottom-up investment approach and looks for companies whose current market price does not reflect future growth prospects. Investments are in companies that can drive future earnings growth. Stocks are selected based on the company's financial strength, management's expertise, growth potential within the industry, and the industry's growth potential.
The portfolio is well-diversified across sectors and market capitalisation and follows a blend of value and growth style of investing. The fund follows a predominantly large-cap allocation of over 70 per cent, with small-cap allocation never exceeding 10 per cent since inception.
The fund doesn't deviate much from the average in terms of performance and is among the least volatile funds in its category. Its ability to stem the downside is its trump card. For instance, in 2008 and 2011, this fund managed to check the slide far better than the category average and the benchmark.
What favours this fund's performance is the large-cap exposure it has in quality stocks such as Infosys, Grasim Industries, L&T, and Reliance Industries. From time to time, the fund manager does take exposure to mid-cap stocks such as Cummins India, Ipca Laboratories and Eicher Motors which helped its performance in 2012.
However, this fund loses out when the markets start rising. During the market rallies in 2007 and 2009, this fund delivered slightly lower than the category average. Likewise, in 2012, it fell short of the category average when the overall markets surged. It is for this reason that this fund does not fall within the top performing funds when the markets rise, but makes up for this flaw when they fall, making it a worthy investment during the tough times. In the long run, this fund does reward investors over a full market cycle.
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