This is a turnaround story. Launched in September 2003, it was only in 2007 that the fund began to give its peers serious competition. Coincidentally, that was the year Robeco took a stake in the AMC. Ever since then, the fund has outperformed both, its benchmark and the category average every single year. Over the 3-year period ended February 28, 2010, it delivered an annualised return of 17.14 per cent (category average: 10.32%, BSE 200: 10.27%).
Till 2006, the fund resembled a mid cap fund with the allocation to large cap stocks rarely exceeding 50 per cent, at times going to as low as 10 per cent. Also, the portfolio tended to be rather erratic. In certain months, there would be just 15 stocks in the portfolio and the number would jump to 55 the very next month, to drop to 41 within three months. This resulted in the fund being hit harder in market downturns. For instance, in the quarter ended March 2004, it shed 11 per cent (category average: -2%). Again, in the downfall in the quarter ended June 2006, it lost 19 per cent (category average: -12%) against the benchmark's fall of 10 per cent.
Ever since 2007, the fund has evolved into a stable offering, beating its peers in market downturns and upturns. The large cap exposure began to get seriously upped (peaking at 77% in 2008) and the portfolio began to be consistently diversified. This fund is predominantly a large cap fund, but we do not ignore mid caps. What we tend to do is pick up emerging leaders within sub sectors. For instance, within the broad sectors of IT or Pharma, we pick up mid caps which are leaders within the sub-theme. This played out well in 2009 when certain mid caps in the IT outsourcing space helped generate great returns.
Though individual stock holdings have not exceeded 7 per cent since 2007 (barring RIL and Bharti Airtel), and allocation to the Top 5 stocks has rarely crossed 30 per cent, the fund manager does not shirk from strong sector bets.
