Meaningful exposures, compelling option

Fund Analysis - Stanchart Premier Equity

A rough patch last year does not dent Standard Chartered Premier Equity's appeal. This mid-cap fund started off reasonably well but lost massively in the June 2006 quarter. While an average peer lost 13.60 per cent, this one was down 24 per cent. Subsequently, things have improved tremendously for the fund.

The June 2007 quarter has been exceptionally good as the fund beat the average peer by an unbelievable margin of 17 per cent, making it the only non-infrastructure fund in the top five diversified equity funds in one-year returns.

That success owes much to fund manager Kenneth Andrade, who took over in February this year. He has not overhauled the portfolio completely but gradually reduced exposure to metals. He does not shirk from taking concentrated bets in specific sectors. While the fund has been betting on services over the past year, in May, it clocked in a not-so-shy 43 per cent exposure. Even now, it consumes over 25 per cent. His stock picks like Srei Infrastructure Finance have also proved to be very rewarding.

This portfolio is true to its convictions. Unlike its mid-cap peers, this fund does not have a bloated portfolio. Its holdings are fairly evenly distributed across 35 stocks. By taking a meaningful exposure to a small number of promising stocks, the fund manager is able to leverage the small size to its advantage. Taking bigger bets in small- and mid-caps is bound to increase risk, but that's what this fund is about. This relatively smaller mid-cap fund is a compelling option to add zing to your portfolio.