The scheme is a go-anywhere fund, and has a mandate to invest 75-10% of its assets in equities. But there are limits on the amount that can be invested in each class of stocks.
ING L.I.O.N seeks to provide medium- to long-term capital appreciation by investing in large-cap, intermediate cap, opportunities stocks and even new offerings.
The scheme is a go-anywhere fund, and has a mandate to invest 75-10% of its assets in equities. But there are limits on the amount that can be invested in each class of stocks.
At least 20% will be invested in large-cap stocks, 0-70% in midcap scrips, and 0-40% in small caps.
Typically, a fund house prefers launching funds which have an underlying theme of investment and restricts their play to only one segment of the market.
However, this go-anywhere fund is unrestricted in its style and is thus a very difficult challenge for the fund manager.
The scheme was launched in December 2005 and is being managed by Paras Adenwalla since the inception.
The performance has not been great, with it seeing a 21.46% (CAGR) appreciation since inception. The scheme’s benchmark BSE 100 has appreciated 28.92% in the period, whereas the BSE Sensex generated 30.84% returns.
The fund has found the going tougher in the last one-year period on the face of the heightened volatility, and has underperformed its benchmark by 9.43%.
The capitalisation allocation currently is heavily skewed towards large-cap stocks — 71.26% of the portfolio is invested in stocks with a market capitalisation of over Rs 6,000 crore.
Taking cues from the midcap trend that has been doing the rounds of the market, the scheme’s allocation to midcap stocks has been hiked compared to the beginning of the year. But is still at only around 27%.
In terms of sectoral allocation, the assets are spread over 24 sectors, with the banking sector getting the highest weightage.
The other dominant sectors in the last one year have been oil & gas, petroleum & refinery and computers- software.
However, since May 2007, the scheme has reduced its exposure to IT stocks in view of the appreciating rupee. It exited from Polaris Software, HCL Technologies and Tata Consultancy Services and has trimmed exposure to Infosys Technologies substantially.
The scheme however is looking to build fresh positions in Take Solution and Satyam Computer.
Among other sectors, telecom has also been a hot favourite, with consistent exposure being maintained towards Bharti Airtel and Reliance Communications. On the other hand, auto & auto ancillaries have fallen out of favour in the last two quarters.
Housing & construction and textiles have also seen a lot of churning. Surprisingly, the fund manager is not too bullish on cement, and has sold positions in ACC and Birla Corp completely between February and March 2007.
The scheme manages a corpus of Rs 59.07 crore, and has seen erosion in the fund size owing to the lackluster performance.
The scheme doesn’t hold a concentrated portfolio strategy. It has a well diversified portfolio across 41 stocks, with Reliance Industries being the top pick.
The scheme has been aggressive in its investment and has a high portfolio turnover rate, but it has not reflected in the performance so far.
By arrangement with mutualfundsindia.com, a unit of Icra Online
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