THOSE looking for a smaller companies fund should check this one out. This fund does not stray far from the category average, in bull or bear markets. But when it does, it unabashedly overwhelms the competition.
Consider its return of 61 per cent in 2006 (category average: 27 per cent). Last year it turned in 115 per cent (category average: 98 per cent). The fund will have a diversified equity portfolio of mid cap stocks that exhibit the ability to grow in a sustainable manner. Equity shall be in the 75-100 per cent range, while futures and options shall not exceed 25 per cent of the portfolio.
It's tough to nail this fund's style. The continuous change at the helm could be the reason since each fund manager wants to operate under his/her own style. But what tends to be constant is that the managers over the years have not shirked from taking high cash allocations.
A few favourite picks have also stayed — SundaramClayton, Thermax, Maharashtra Seamless, Kirloskar Oil Engines and Madras Cement — all of which have delivered handsomely.
Ever since 2006 when the corpus of the fund began to rise substantially, the fund manager began to increase the number of stocks. After Satish Ramanathan took over in Sept 2007, he worked hard at consolidating the portfolio to average at 54 over the past one year. Despite the frequent fund manager changes and sparks of brilliance, it has the second highest 5-year trailing return of 28 per cent (June 30, 2010) against category's 21 per cent.
