Though the mandate is to invest up to 50 per cent of its assets in foreign equity, it has peaked at 35 per cent with majority of the investments in Asian stocks.

The fund employs a value-based investment approach and looks for stocks that have an attractive dividend yield. According to Chetan Sehgal, CIO - India, Emerging Markets Group, Templeton Equity, "the bottom-up, value oriented approach is driven by three principles - value, bargain hunting and long-term orientation. The investment selection process focuses on finding companies that are mispriced relative to their potential five years in the future."

The fund maintains a fairly compact portfolio of around 31 stocks (average over past year), out of which around 22 are listed in India.

Don't expect to see a portfolio here which bears similarity to its peers. First of all it stands out in its international allocation. Since it specializes in a value based style of investing, there could be some bets viewed as contrarian. The 13 per cent (average) allocation to Metals since launch is a case in point, even during the market meltdown of 2008. And barring a miniscule allocation for a few months in 2008 and 2009, the fund has steered clear of Pharma and has barely dabbled in Power.

The sector allocations are just the by-product of the stock picking process. For instance, for the 14 months ended August 2010, the fund had an average allocation of around 14 per cent to Chemicals, the only stock owned being Tata Chemicals. "Tata Chemicals has a diversified business portfolio with interests spanning soda ash, fertilizers and salt. It has a global footprint and holds investments in various Tata group companies," explains Sehgal. Barring this one, no Indian stock has accounted for more than 8 per cent of the portfolio; foreign stocks have not exceeded the 5 per cent mark.

Since 2010, the fund has been classified as 'Equity: Multi Cap' from its earlier positioning as 'Equity: Large & Mid Cap'. From being an average performer for two years, from 2009 onwards the fund's performance began to significantly improve. However, its long-term returns put it in a good light.