DESPITE a portfolio of around 57 stocks, a large-cap tilt and exposure to derivatives, debt and cash, it is not a fund for the cautious. True to its calling, it scouts for opportunities and doesn't hesitate in taking concentrated sector and stock bets. This leads to extreme returns.
In the bull phase (June 15, 2006 to January 8, 2008), it delivered 91.26 per cent against the 81.29 per cent average of other opportunity funds. Unsurprisingly, it shed higher in the bear hug of 2008. While in the recent run up (March 9, 2009 to June 30, 2010) it delivered 85 per cent against its peers 87 per cent.
Its charm lies in its capability to identify sector trends ahead of time. In 2005, it rode the FMCG wave and the move paid off. In the first quarter of 2006, it focused on metals. In 2007, its exposure to construction and metals that resulted in a superb performance. In 2008, it was overweight on the least-hit FMCG sector, which helped it get away with an average fall. More recently, it played its cards well in the auto boom. The category average to the auto sector was around 2.44 per cent, while this fund's exposure stood at 4.58 per cent in the first quarter of 2009.
The fund increased its allocation to large caps from January (58 per cent) to March 2009 (71 per cent), while again brought it down to 60 per cent in December 2009. The equity allocation has averaged at around 94 per cent in the past six months. Yet the broad diversification across sectors has been maintained. The fund manager actively churns the portfolio and books profits regularly, so it's not surprising to see 78 stocks
make an appearance for just five months or less. The quarterly returns show that it's not a consistent out performer. There have been times when it has been on a roll and when it failed to deliver average returns.
