HIGHER than average returns and lower risk makes this large cap-oriented fund a sound proposition for any equity investor.
Launched in August 2002, the fund underperformed its category for the first three years.
But ever since Patil took over, the fund has surpassed the average performance every single year starting 2006. Mahesh Patil holds an engineering as well as an MMS degree.
Patil must be credited with excellent sector calls. This helped him deliver superior returns in 2006 and 2007. In 2008, Patil cut exposure to construction and engineering, which were among the worst hit. Along with aggressive cash and debt calls, he contained losses to a lower level. Ironically, his lowest equity allocation in the past two years was in January and February 2009 (average 73%), just before the market began to rally.
Nevertheless, he moved quickly to beat the category average by a margin of 10 per cent in 2009, despite a large cap bent (71% by December 2009).
Though the fund manager is not fixated on any market cap, he has been tilting towards a large cap orientation. In 2007, large cap allocation dropped to 55 per cent by December. In 2008, it began to gradually increase, peaking at around 82 per cent by February 2009. By the end of the year it stood at 71 per cent.
The fund has evolved from a concentrated offering of around 25 stocks to around 60. In the recent years, apart from Reliance Industries, no other stock has exceeded 7 per cent of the portfolio. The portfolio targets the same sectoral weights as its benchmark -the BSE 200. However, it does have the flexibility of selecting stocks within a particular sector from a wider investment universe.
