This fund invests in stocks drawn from the companies in the BSE 200 Index, as well as India's 200 largest capitalised companies. With equity exposure up to 90 per cent, it has managed to achieve capital appreciation over time. The fund has a solid long-term record and has been the best performer over five years, with over 23 per cent returns.
It has consistently proven itself in 14 years, barring 1999, when the high exposure to fast moving consumer goods (FMCG) and healthcare backfired in the tech-dominated rally, and between June 2007 and January 2008. The fall in 2007 was due to offloading energy. The fund also missed the realty and utilities boom in this period. The fund manager stayed away from realty as he didn't understand the business.
In 2008, the funds success in standing in a bear market, without debt or high cash levels, was a testimony to the managers skill. Large-cap bias and exposure to FMCG and healthcare restricted the fall to 45 per cent (11 per cent less than BSE 200) and 8 per cent lower than the category. It was in 2009 that the manager outperformed the category by 14 per cent. He was overweight on auto and banking, his bet on SBI paid handsomely. He also reduced exposure to power utilities and energy, and reduced exposure to RIL.
Investors may fret occasionally but the fund has a knack of rewarding investors who stick with it. The portfolio of 60 stocks is logical, given its size.
