After a year (2009) of bulls, it can be said that the year 2010 was primarily the year of consolidation. The markets remained volatile for most of the part of the year but managed to close with decent gains of nearly 15 per cent (as on December 25, 2010). However, worries like high inflation and the rising interest rate scenario, global head-winds over the geopolitical tensions, as well as the sovereign debt issues, and finally the domestic scams restricted the markets from touching new highs. It has been a tough year for the investors though and with the end of 2010, it brings back that time when most of us must be reviewing or evaluating and finally contemplating a shuffling of the portfolio.

So why not start the New Year with a fund which ensures stability and consis-tency in performance for the years ahead? Here is a fund that has managed to stay ahead of the category returns in each calendar year since its inception. 

A fund that is part of a pedigree that has been quite consistent and a decent track record aided by a fund manager who has done exceptionally well with the funds that he has managed. Fidelity Equity is obviously not a fund that will make heads turn, though its performance has been good enough to win the investors’ confidence and attract AUM of over Rs 3,307 crore (as on September 30, 2010).

In YTD, when the average diversified equity category returns stood over 15 per cent, this fund managed to register an impressive performance by giving returns of over 24.35 per cent in the same period. Looking at the performance over a longer horizon, the fund has managed to outpace the category returns by decent 933 bps and 631 bps in one and three years’ period. The man behind such a performance, Sandeep Kothari, has a decent track record to flaunt for himself. All of the four funds that he manages at Fidelity have stayed ahead of the category returns by a fair margin over the long run.

Being a multi-cap fund, the fund has been taking active cash calls on the portfolio though it has been low on volatility for most of its tenure. In October, 96 per cent of the assets were invested in the equities wherein 80 per cent of the fund’s portfolio was invested in the large-cap stocks. Such market-cap allocation ensures stability of the fund. And out of its 61 stocks’ equity portfolio, the top ten stocks contributed over 40 per cent while the top three sectors contributed over 52 per cent of the overall sectoral allocation. Such a strategic allocation of having a diversified stocks portfolio, large-cap tilt, and concentrated sectoral portfolio makes this fund a good bet for conservative investors to buy (or do SIP) and hold for over three to five years.