By Research Desk | Nov 28, 2007 | Email article to a friend
It stole the show in 1999 and then turned into a meager side show for two years. However, after having been acquired by Birla Sun Life, the fund has evolved into a steady performer over the past few years
This erstwhile Alliance fund seems to be regaining its days of glory but without the brashness of its youth. After a dazzling performance of 280 per cent (1999) and a miserable two years (2001, 2002), it now seems to be back on track.
Like a chameleon, this one constantly changed its colours. In its initial years, it was a dangerously focused offering with extreme concentration in few technology stocks, followed by a stream of small holdings. It paid off handsomely before falling in the doldrums. What followed (since 2003) were smaller portfolios of 30-35 stocks with the top five holdings consuming 35 per cent of the assets. This brought in the much needed sectoral diversity.
A good move at this time was the identification of the mid-cap rally early enough. In September 2005 the fund was acquired by Birla Sun Life. The natural consequence was a significant toning down of the aggression. The number of stocks gradually rose to around 50 and the top 5 holdings now add up to just around 20 per cent of the assets, which remain evenly spread across large- and mid-caps. What's more, the fund manager does not hesitate to shift a considerable part of assets to cash at the first sign of trouble.
Despite this ongoing transformation, the fund has evolved to be a steady, well-diversified, multi-cap offering that has consistently beaten the category average. With erratic performances and concentrated portfolios being a trend of the past, this fund is suitable to be among the core holdings of your portfolio