BIRLA SUN LIFE MID CAP
One of the major issues in the mid-cap space is liquidity. The fund manager of Birla Sun Life Mid Cap recognises this and limits exposure to single stocks to five per cent. The fund has a large-cap limit of 25 per cent, which it had touched before the March 2009 rally began. However, in the next few months, large-caps were reduced to a meagre one per cent. This helped the fund deliver 120 per cent in 2009 (category average, 97 per cent).
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 1.69 |
| 6-month | 0.42 |
| 1-year | 46.49 |
| 3-year | 12.58 |
| 5 year | 23.75 |
The fund hasn't been a top-notch performer all the time. Launched in 2003, it made its mark only in 2006. In 2007 and 2008, the manager's sector calls helped the fund deliver returns in line with its category and benchmark.
The portfolio is churned frequently. But, the fund isn't aggressive, as the manager avoids concentrated bets. For the past five years, no sector has breached the 25 per cent mark and no stock has gone beyond seven per cent. The portfolio, currently at 53 stocks, may appear bloated at times, but the manager puts it down to portfolio transition and the time it takes to shift between themes.
Overall, the fund stays in good stead in bull runs, as well as bear phases. It takes full advantage of market rallies, yet manages to curtail losses in downturns. Over the long term, it has never disappointed investors. The fund's five-year annualised return, as on April 30, was 27 per cent, six per cent more than its category average.
IDFC PREMIER EQUITY
IDFC Premier Equity's fund manager, Kenneth Andrade, says it aims to capture shifts in the business environment with regard to new opportunities, technologies and trends. True to his belief, he doesn't hold back from taking bold, contrarian calls. He is one brave manager, but his convictions haven't let him down. The fund has the highest three-year annualised return (27 per cent) in its category, as on April 30.
If you think that's remarkable, hear this: in 2007, the fund was streets ahead of its category, delivering 110 per cent, 46 per cent more than the category average. The manager achieved this without going overboard on metals. He concentrated on services, his favourite sector.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 2.89 |
| 6-month | 8.11 |
| 1-year | 47.19 |
| 3-year | 20.42 |
| 5-year |
- |
The fund remains focused on strong sectors and smaller companies. The portfolio is invariably tight. These traits might give it a risky appearance, but it isn't really. No stock ever goes beyond a seven per cent holding and the portfolio shuffles with around 30 stocks.
The fund has not only done well in bull runs, but impressed in bear phases, too.
A relatively new fund, it has been around for only four years, but bettered the category average in all quarters. The manager likes to keep the corpus small and, periodically, the fund is closed against fresh investments. Overall, its performance is impressive enough to be the mid-cap holding of a portfolio.
RELIANCE GROWTH
This one's huge and one of the best. Reliance Growth is the largest fund in its category. Yet, this big size hasn't stopped fund manager Sunil Singhania from earning it the top performer's position as well. The fund's five-year annualised returns are its category's highest. Since 2001, it has beaten the category average every single year.
The fund manager has managed to achieve all this by chasing growth-oriented companies. He likes to stay invested for longer periods and doesn't adhere to quick exits. Some of his all-time favourites have been Jindal Steel & Power, Reliance Industries Ltd, Divi's Laboratory and State Bank of India. On sectors, his top picks are financial Services, metals and energy.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 3.82 |
| 6-month | 6.38 |
| 1-year | 39.04 |
| 3-year | 13.90 |
| 5-year | 26.36 |
| Holding Related Data as on 30th April 2010 Trailing Returns as on 26th May 2010 | |
This preference for metals, along with aggressive cash calls, exposure to derivatives and a high amount of diversification, is what helped the fund stay afloat in 2008. Big ships can sink fast, but Reliance Growth didn't. Its able captain managed to restrict its fall to 54 per cent (category average, minus 60 per cent). No sector, apart from metals, accounted for more than 10 per cent of the portfolio in 2008.Between April and December 2009, large-caps accounted an average of 43 per cent (category average, 22 per cent). Despite the cautious approach, the fund did earn 12 per cent more than the category in 2009. The fund's big asset base has been managed well by Singhania. Allocation to a single stock has rarely crossed five per cent. All said and done, the fund has enough credentials to be the core holding of any portfolio.
