It rewards investors in the long run
Over the past 13 years, this fund has had its bursts of brilliance and bouts of underperformance. But it has evolved into a middle-of-the-road performer that rewards its investors who hang in for the long-term. Its five-year returns of 24.46 per cent (September 30, 2009) bears testimony to that.
The fund aims at keeping the equity allocation in the 50-75 per cent range and over the past year it has averaged at 66 per cent. In the present rally, it raised its equity allocation from 56 per cent (January 2009) to 75.44 per cent (May). This move contributed to the fund’s gain of 84.93 per cent in the rally dated March 9, 2009 to September 30, 2009 (category average: 69%).
This aggressive equity allocation with a focus on growth stocks (half the allocation is to mid and small-cap stocks) gives it a risky slant.
But the fund manager plays it safe is by ensuring that the portfolio is not concentrated on just a few stocks.
The fund tends to adopt a contrarian stance in its sector bets. In the first six months of 2007, the fund averaged an exposure of 14.59 per cent to Financials (category average: 7.38%). By December, its exposure to Services was 16.23 per cent (category average: 5.82%) and the fund had no exposure to Metals. In the case of Energy, it had an exposure of just 5.32 per cent (category average: 10.72%).
On the debt side, the fund has a preference for G-Secs and bonds. It mostly maintains a high quality portfolio but does stretch the maturity. The actively managed debt portfolio goes for duration calls, hence the fund manager tends to stay away from Commercial Paper (CP) and Certificates of Deposit (CD). –Value Research
Over the past 13 years, this fund has had its bursts of brilliance and bouts of underperformance. But it has evolved into a middle-of-the-road performer that rewards its investors who hang in for the long-term. Its five-year returns of 24.46 per cent (September 30, 2009) bears testimony to that.
The fund aims at keeping the equity allocation in the 50-75 per cent range and over the past year it has averaged at 66 per cent. In the present rally, it raised its equity allocation from 56 per cent (January 2009) to 75.44 per cent (May). This move contributed to the fund’s gain of 84.93 per cent in the rally dated March 9, 2009 to September 30, 2009 (category average: 69%).
This aggressive equity allocation with a focus on growth stocks (half the allocation is to mid and small-cap stocks) gives it a risky slant.
But the fund manager plays it safe is by ensuring that the portfolio is not concentrated on just a few stocks.
The fund tends to adopt a contrarian stance in its sector bets. In the first six months of 2007, the fund averaged an exposure of 14.59 per cent to Financials (category average: 7.38%). By December, its exposure to Services was 16.23 per cent (category average: 5.82%) and the fund had no exposure to Metals. In the case of Energy, it had an exposure of just 5.32 per cent (category average: 10.72%).
On the debt side, the fund has a preference for G-Secs and bonds. It mostly maintains a high quality portfolio but does stretch the maturity. The actively managed debt portfolio goes for duration calls, hence the fund manager tends to stay away from Commercial Paper (CP) and Certificates of Deposit (CD). –Value Research
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