Opportunity funds make it sound like the fund manager is having loads of fun. No market cap, sectors or themes to restrict him. He can run wherever he smells opportunity, drop the stock like a hot potato and his investors (or boss) won't question him for his aggressive churning of the portfolio.

Obviously, with such a mandate, the complexion of the fund can change rapidly. It could be a mid-cap offering for three months and than a large-cap for the next six before taking a mid-cap slant again. This makes benchmarking a tough call. So the best way to look at them is to see how they are faring vis-�-vis their peers.

Franklin India Opportunities and HSBC India Opportunities are similar on a few crucial fronts. Besides the identical objective, they were launched at the same time and each manage assets between Rs 700 crore and Rs 1,000 crore (Rs 7-10 billion).

Probe a little further and there still appears to be no difference. Both are bold when it comes to holding cash, if the need be, and will change their market cap bias to suit their own perceptions of the market.

What's more, they even share identical performance dates: best (starting June 14, 2006) and worst (May 12, 2006) monthly performance, best quarterly performance (June 14, 2006) and one-year performance (starting May 3, 2005 for Franklin and a day earlier for HSBC).

But look beneath the surface and the two are clearly separate identities with their own distinctive styles. Though HSBC has a slightly higher average equity allocation of 95.45 per cent as compared to Franklin's 93.44 per cent, the latter is more aggressive.

Franklin takes its opportunistic objective very seriously. It looks for opportunities where it could make a fast buck and then gallantly places its bets on them. As a result, the fund holds fewer stocks than HSBC and takes higher positions in them. HSBC has averaged at around 50 stocks in its monthly portfolio while Franklin has been at just 32. Naturally, this makes Franklin a more riskier proposition specially if a pick goes wrong.

For instance, Franklin and HSBC have dabbled in the "risky" arena of real estate stocks. Both picked up Ansal Properties in December 2006. But it occupied 4.5 per cent of Franklin's portfolio and only 0.62 per cent of HSBC's. HSBC sold the very next month and could have made a profit on it. But now, the price has been hammered and Franklin still holds on to it.

D S Kulkarni Developers was another stock that both picked up at different times. In tune with their style, HSBC had a 0.56 per cent exposure to the stock but Franklin had 2.30 per cent. Looking at their entry and exit months, it is questionable as to whether they made a substantial gain, if any at all. Franklin also invested very briefly in Sobha Developers [Get Quote] (3.92 per cent) while HSBC considered Mahindra Gesco (1.43 per cent).

In its stock selection too, Franklin has been more daring and has predominantly tilted towards mid-caps, unlike HSBC which has favoured large-caps. Though the free-wheeling nature of the funds can tilt them in any direction, this has broadly been the track record. Of course this held well for HSBC which started building up its large-cap positions ahead of the large-cap rally last year.

But the aggression is best manifested in Franklin's investing strategy. Neither fund manager subscribes to the buy-and-hold style. Franklin has held just five stocks since inception and HSBC just three. To further carry on the argument, Franklin has held 90 stocks for just four months or less and HSBC's corresponding figure is 83. 

But Franklin just does not stop at holding the stock for a short period. What's distinctive is that the fund manager enters and exits the same stock rapidly.

Take Jet Airways [Get Quote]. Franklin held it for two months (April-May 2005) before exiting and entering again for a month (November 2006). HSBC, on the other hand, bought the same stock in May 2005 and held on till it sold in February 2006.

SBI [Get Quote] is another case in point. Franklin bought in March 2004 and sold the next month to re-enter in June 2005 and sell two months later. After that it has appeared in its monthly portfolio twice in 2006 and once in 2007. HSBC bought in May 2004 and sold it two years later. It appeared once later in February 2007.

Franklin bought RIL [Get Quote] for five months in 2004, sold and bought again for two months that year. In 2005, it once again bought and sold on two separate occasions of three and two months each.

The following year, it again picked up RIL for two months and this year, held it for just a month. HSBC bought the same stock in May 2005 and it still exists in the portfolio. Before that, it had held it for three separate periods in 2004 and 2005.

While both are risky propositions, Franklin does take a higher risk and is more aggressive. But the aggression has paid off and the fund has delivered handsomely. If you are looking for a racy fund, this one fits the bill.

If you are happy with a fund that fits neatly into a style box such as large-cap value, then these funds are not for you. But if being boxed in holds no appeal and you want a spicy addition to your portfolio, take your pick from the basket of opportunity funds.