DBS CHOLA MIP
Fund manager Anant Deep Katare took over the fund in 2007 and the results were immediate. In the last quarter of that year, the fund returned 12.83 per cent (category average, 5.36 per cent) and its annual return was 16 per cent (category average, 12.5 per cent). It went on to deliver 7.52 per cent in 2008 (category average, minus 1.52 per cent). Its three-year and five-year returns also put it ahead of the category average.
When the fund manager sees opportunity in equity, he tanks up on it. For instance, in May 2009 his equity exposure stood at 19.5 per cent. But to his credit, he does not cross the mandated 20 per cent. Overall, his equity tilt is pretty moderate.
The 2007 annual performance was largely due to equity being upped from September onwards (12 to 18.68 per cent). Once the market tanked, exposure gradually began reducing, to suddenly drop in April 2008 (3 percent),only to shoot up the very next month (14 per cent).
This flexibility in equity allocation is also reflected in the churning of his portfolio. The number of stocks can go from two (October 2008) to21 (June2008). Though the times when the number of stocks held drops, so does his equity allocation.
On the debt side, the fund plays it safe by largely maintaining a lower maturity profile and sticking to high quality paper which helps contain the downside. Currently, it has 47 per cent of its debt portfolio in commercial paper.
Barring 2007, the fund has been regular with its dividends. Since December 2007, it has declared a dividend every single month (0.88 per cent). Our grouse is with its expenses, which are on.the higher side.
RELIANCE MIP
This fund is ideal for investors who are willing to compromise with slight hiccups for the return that they ran earn over the long haul.
Although rare to see the fund touch its maximum equity allocation of 20 per cent, it has averaged 15.8 per cent since its launch and rarely dipped below 10 per cent. Within this allocation, the fund manager actively churns his portfolio among stocks of all market caps, and over the past year has limited his exposure to around four stocks, along with a derivatives exposure.
In 2007, with no derivatives exposure, the number averaged nine. So, if his bets play out, the fund is in a position to deliver good results. Though vulnerable during market downturns, it's quick to bounce back.
It has outperformed its peers every year, barring 2007. In 2008 it delivered 9.57 per cent (category average, minus 1.52 per cent).
The fund's aggressive tilt is seen in both equity and debt.
Anticipating a downward revision