THOUGH launched in August 2005, the fund emerged as a strong contender only since 2007 when its back-to-back annual performance put it ahead of its peers.
It beat the category average in 2006 and was the best performer in 2007 and 2008. It topped the category in 2007 (92.92%) and fell the least in 2008 (-51.64%). It also has the second highest 3-year annualised return (12%) among infrastructure funds (as on May 31, 2010).
In 2008, the fund made the right moves. It hiked up its exposure to large caps to average at around 77 per cent, while that of its peers averaged at 54.61 per cent. But its ability to contain the downside was helped in a large way by the heavy debt exposure (which peaked at 36%) and the liberal use of derivatives.
But the fund got a miss in the recent rally (March 9, 2009 — May 31, 2010) with a return of just 66 per cent, way below the category average of 83 per cent.
The fund manager's style and investment philosophy is valuation driven. He actively changes the portfolio's complexion with no qualms about going against the herd.
At present, the fund is betting heavily on energy sector, as the allocation to the sector has been moved up to as high as 40 per cent in September 2009 and currently is at 35 per cent.
The fund has re-entered power sector stocks NTPC, which it exited in August 2008 and increased the shares of Tata Power to three times of what it was in June 2009. Also, ONGC has made a comeback into the fund
in June 2009. This fund includes every sector barring FMCG, Media, Infotech and Pharma. The fund manager rarely bets more than 8 per cent on a single stock, barring a few large cap names.
