FRANKLIN INDIA PRIMA PLUS
The fund has evolved from a brash and indisciplined offering to a well diversified player, with excellent downside protection abilities and decent returns.
Since 2001, the fund has maintained a relatively higher bias to large-cap stocks to provide stability, but has consistently beaten the Sensex. And since then, in each quarter when the category average has been in the red, Prima Plus has contained its fall to a lower level.
Fund manager Sukumar Rajah no longer chases fads and sticks to his convictions. In 2007, he largely stayed away from metals, power and real estate. This led to a tepid performance, though he beat the Sensex.
In 2008, the fund manager preferred to be almost fully invested (average equity exposure of 95 per cent), despite the leeway to invest up to 40 per cent in debt and 20 per cent in cash. Still, it shed a relatively lesser 47.71 per cent (category average, 53.35 per cent). The large-cap bias and increased exposure to defensives came to its aid.
The portfolio of some 55 stocks, where the liquid, large-cap portion averaged 61 per cent (one-year averages), is well diversified.
The fund manager is essentially a bottom-up stock picker who does not dabble in momentum stocks, at least in this fund. So, what you may expect is a stable and consistent, though not chart-topping, return.
RELIANCE REGULAR SAVINGS EQUITY
This fund has a knack for turning the competition green with envy. In its short history, it has been subject to frequent fund manager changes, but been fairly consistent in performance. Launched in 2005, it impressed the very next year. Though it was on a high in 2007 with a return of 93 per cent, way ahead of the category average, it did not fall off the cliff when markets plummeted in 2008.
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The great return of 2007 was mainly due to the last quarter performance. Omprakash Kuckian took over as fund manager in November that year and wasted no time in placing bets. The portfolio took over a totally different complexion the very next month (December 2007). In these two months, exposure to large caps stood at around 20 per cent. The fund manager rightly deserved a pat on the back when his portfolio delivered 54.66 per cent (category average, 25.70 per cent) in the quarter ended December 2007.
On the August portfolio, the fund manager bet heavily on energy (19.67 per cent) and financials (10.29 per cent). But he was well diversified at the stock level, as the largest holding was not even 5 per cent. Over the past one year, allocation to a single stock rarely crossed 5 per cent, a significant change from its earlier days.
With the highest Sharpe Ratio (a measure to determine reward per unit of risk) in its category, investors here are a satisfied lot.
TATA EQUITY PE
This fund got its act together in 2007, when it delivered a return of 84 per cent (category average, 59 per cent).
The fund managers' agility in the recent rally between March 9 and August 31 was remarkable. They were swift enough to lower cash from 15 per cent in February to 2 per cent by June. A timely move to technology in June and July turned out to be beneficial, as the sector thrived in these two months. Large-cap exposure also dropped from 49 per cent in February to 29 per cent by July, which was a smart move, since mid and small caps were the stocks that rallied the most. The return was an impressive 104 per cent (category average, 89 per cent).
The fund's strategy is unique: to invest at least 70 per cent of its net assets in stocks that have a trailing P/E less than that of the Sensex at the time of investment. At first blush, it would appear that the portfolio would naturally be value-based. Not necessarily, simply because the fund managers gravitate towards low PE stocks does not translate into them offloading when it goes up. Moreover, they have a free hand with the balance 30 per cent.
The fund's diverse portfolio won't see too much of aggression with individual stock bets, though strong sector exposures have been the norm.