In the first year of its existence (2006), it was the worst performer in its category. Since then, it has put up a decent performance. It made its mark in the downturn of 2008 with a top quartile performance. Therein lies the success of the fund. It impresses during market downturns. Though its performance in 2010 was not disappointing, it fails to impress during rallies.

The reason for such erratic behaviour could be discontinuity at the helm; five fund managers since August 2005. However, Anand Shah took over as CIO in March 2011 and after that Shreyash Devalkar replaced Amit Nigam as the fund manager. Going by Shah's earlier stint at Canara Robeco, this could be good for investors.

The fund utilises the agility that its small size provides. A case in point: allocation to Financial Services (14%) in August 2011 was halved in September and again increased in October (13%). Back in January 2008, allocation to Diversified was brought down to 4 per cent from 25 per cent (December 2007). Similarly in 2009, allocation to FMCG was halved between June and August that year. But Devalkar puts these moves down to disciplined bottom-up stock picking. "Dividend yield is the starting point for stock selection for this fund, ensuring that the stocks are picked at reasonable valuations. We select the companies based on strength of business model, sustainable competitive advantage and its ability to generate free cash flow, today and in future. Subsequently, management capability and corporate governance of the company are critically evaluated. And lastly, we evaluate the valuations to see if it is at a discount to its intrinsic value.

No longer is the fund as aggressive as it was when single stock bets have gone up to 10 per cent. Since 2007, it has not exceeded 7 per cent and the portfolio holds around 37 stocks (1-year average), a far cry from it held around 20-25 stocks.

This fund has not produced any breathtaking returns and no top quartile performance in bull markets. By stemming the fall in bear ones, its decent track record positions itself as a good choice for conservative investors.

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