This is an all-weather fund and the best-performing, with an annualised return of 22 per cent over the five-year period ended December 21. The fund has not only impressed during the market rallies but stood apart with its excellent downside protection capabilities. A lot of the performance is reflected from September 2008, five months after the new fund management team headed by Anand Shah joined.
"We focused on the domestic consumption theme as we saw the potential of rising incomes amongst Indians and their ability to spend more. We bet on financials, utilities, pharmaceuticals," explains Shah.
The fund manages `220 crore in its portfolio, that gives it the necessary agility to make quick shifts and grab opportunities. When the category had a 23 per cent fall, this fund limited losses to 11 per cent in the quarter ending December 2008. Again, in March 2009, when the markets were entering the bull run, Shah was able to quickly deploy cash upto 97 per cent, resulting in the fund outperforming the category by eight per cent.
The fund manager frequently invests and sells few stocks in the portfolio, using a target price exit strategy. For instance, Reliance Industries, Axis Bank and Zee Entertainment Enterprises are stocks in which the fund manager has deployed this strategy, which has been profitable. However, Shah argues these instances to be exceptions, as he normally invests with a long-term investment horizon. The fund is well diversified, with 52 stocks in its portfolio that makes it stable.