AIG Infra & Eco. Reform Fund: A buy for high risk takers
AIG infrastructure and Economic Reform Fund is an Thematic � Infrastructure fund whose objective is to generate long-term capital appreciation by investing primarily in Infrastructure sector. This fund has been a consistent performer and ranked 2 by Crisil. It is suitable for investors who are willing to take risks with an investment horizon of long term, reckons financial advisor Arnav Pandya
Nature; Equity oriented open ended
Inception: February 2008
Assets under Management: Rs 94 crore at the end of January 2012
Fund Manager: Huzaifa Husain
The fund focuses on the infrastructure sector and hence there are companies from various areas that comprise this sector in the portfolio of the fund. At the end of January 2010, the fund had the highest exposure to Jindal Steel and Power with an 8 per cent exposure. This was followed by GVK Power & Infrastructure and then by three companies from the industrial capital goods space consisting of Thermax, BHEL and Bharat Electronics. The top 10 holdings comprised total of 60 per cent of the total portfolio. The fund was outperforming the Benchmark - the BSE 100 over the one year time period.
At the end of July 2010 the top holding was Container Corporation of India followed by Indraprastha Gas, BHEL, Bharat Electronics and Thermax. A total of 11 per cent of the portfolio was in cash and cash equivalents and this was a high figure. Companies from the Cement and the Banking sector were also present in the portfolio. The fund remained an outperformer over the one year time period.
The fund had a further change in the portfolio over the next six months as now Bharti Airtel was the top holding at the end of January 2011. This was followed by Indraprastha Gas, Cummins India, Coromandel International and Torrent Power. Cash equivalents now comprised one fourth of the entire portfolio. At the same time the share of the top 10 holdings came down to around 45 per cent of the portfolio. The fund was now underperforming the Benchmark over the one year period and the period since inception.
The fund continued to maintain a sizeable part of the portfolio in cash and cash equivalents and this was 8 per cent of the portfolio at the end of July 2011. Gas was now a high weightage area with 3 out of the top 10 holdings coming from this specific area. Coromandel International was the top holding followed by Bharti Airtel, Petronet LNG, Indraprastha Gas and Power Grid Corporation. The fund was now an outperformer over the one and three year time period so the efforts on the portfolio front were showing results.
The fund continued its focus on the gas and the power segment with these holdings taking 2 positions each in the top 10 spots in the portfolio at the end of January 2012. Petronet LNG was the top holding with an exposure of nearly 8 per cent of the portfolio followed by Coromandel International, Indraprastha Gas, L&T and Jindal Steel and Power. The fund was an outperformer over the one and three year time periods.
This fund is meant for investors who are interested in the core sector and heavy industry space and hence suitable for those willing to take a higher amount of risk as well as have a 3 year holding time horizon.