Ever since 2003, it has beaten the category average every single year. Its charm lies in the fact that it has impressed during both favourable and unfavourable market conditions.
The fund's performance in 2007 was impressive at 70 per cent. Ever since Shah took over (June 2006), the fund's performance in declining quarters has improved considerably. In the bear phase spanning January 8, 2008 to March 9, 2009, it shed 49.5 per cent.
But when the market began to rise in March 2009, Shah was not very quick in lowering his cash allocation and did so mainly in May.
Neither did he go heavy on construction, metals or financials, which boomed during that time.
As a result, the fund delivered 99 per cent (category average: 104 per cent) when the market rallied from March 9 to December 31, 2009.Right now he is focusing on oil & gas downstream and top quality IT Services.
If erring on the side of caution is typical of Shah's style, so is his rigorous diversification. Exposure to the top 10 holdings is generally capped at 35 per cent and allocation to the top three sectors remains below the category average. Under Shah's management, single stock allocation has not crossed 5 per cent. The fund does take short-term bets and in the long-term holdings, intermittent profit booking does take place.
