This fund follows a combination of top-down and bottom-up approach based on the macro economic framework. Investments follow a minimum 50 per cent exposure to BSE 100 or the top-100 companies by market capitalisation and invest the remaining 50 per cent outside the BSE 100. The rationale to invest outside the top-100 companies is to take exposure in unique stock ideas that have potential to grow. Moreover, the fund manager has the leeway to take cash positions up to 25 per cent to counter abnormal market conditions.

Performance

In 2005, when this scheme was launched, it mopped up `700 crore to be the biggest fund in the category. However, the next two years were dismal. It took two more years before this fund came on its own, when it managed to check its fall compared to the benchmark and category average in 2008. With the exception of 2009, when it slipped below the benchmark, this fund has consistently fared well since then. In 2012, it was a top quartile performer and the second-best in the category. The enhanced performance was on back of its ability to maintain a mid- and small-cap focussed fund with 36 to 81 per cent exposure in the past 3 years. That the mid-caps did exceptionally well in 2012 helped the fund's performance.

Regular investments in small-cap stocks such as Cummins India, KSB Pumps, SML Isuzu, Alstom T&D India and Triveni Engineering have only reiterated its mid- and small-cap tilt. The fund manager also maintains allocation to quality large-cap stocks such as SBI, Maruti Suzuki and HPCL.

Further, the strategy to increase equity allocation during market downturn has paid out, given the fund's mandate to go high on cash to counter abnormal market conditions. A portfolio of 46 stocks with exposure to diverse sectors has also aided the performance.

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