Mutual Funds- Good Picks
Geojit Research Desk
Sundaram BNP Paribas Select Focus
Sundaram BNP Paribas Select Focus has been awarded the best large cap equity fund by CRISIL for the year 2006 and 2007. The ranking was primarily on the basis of superior return score. Since launch in 2002, the fund has provided 38.75% annualized returns at the current valuation. The fund has managed to yield positive returns despite difficult market conditions now and the last one year trailing return is around 8%. The fund has been following a focused investment strategy by limiting the number of holdings when compared to other diversified equity funds and the strategy is working well. The risk of such a strategy has been mitigated considerably by focusing on the giant and large cap stocks. The fund is managing around Rs.818 crore in recent days and over 90% of this portfolio is deployed in large caps. A few mid cap stocks have also been added in the portfolio to enhance performance.
The fund is overweight in technology and energy sector stocks with exposure of 20.53% and 18.63% respectively of the total assets in these two segments. Financial services, consumer non – durable, healthcare and metal stocks are the other major ingredients in the portfolio.
The fund is an excellent one for long term investment and regular investment could be considered through a Systematic Investment Plan.
HSBC Equity
The fund has built a strong track record by the last five years and has been in the list of top rated funds. On an average, the fund has yielded annualised return of above 40% for the last five years. Though the performance during the last two years was not up to its peers, it has outperformed the Nifty in four out of the last five years. It has also managed to limit the downside during difficult times. Net asset value of equity fund category on an average has eroded by nearly 36% since January 2008 whereas it is around 28% in the case of HSBC Equity.
A large cap fund with assets under management of Rs.1096 crore, HSBC Equity has deployed over 80% of its assets in large caps and the rest is kept in mid caps and in term deposits. Energy, technology, financial services, consumer non - durable and chemicals are the preferred segments in the portfolio.
Reliance Growth
Reliance Growth Fund is the second best performer for the past five years with an annualised return of over 48% at the current valuation. The fund is also one among the best ten for the last three year term. A slight weakness in its recent performance appears to be a temporary setback due to the huge meltdown in the value of mid cap stocks and one can choose this fund for the long term.The fund has mainly been in the mid cap and small cap area with a little bit of aggression and this strategy has worked well in achieving the best results over the long term. Since its launch in 1995, the fund has generated nearly 31% annualised return at the current valuation.
With assets under management of Rs.4500 crore plus now, the fund has invested around 65% of its assets in the mid and small cap category while the rest is parked in large caps now. The portfolio is well diversified with good picks from energy, healthcare, metal, chemicals, technology, services, basic engineering etc.
HDFC Top 200
This fund has been doing very well, beating the category average returns and the major indices. For the last three and five years, the fund yielded at 27% and 38% respectively on an annualised basis as against the category average return of 19% and 34% respectively. The idex returns for these periods are in the range of 23% and 30%.
The portfolio of the scheme is a good blend of large cap and mid cap stocks with 69% in large caps and the remaining is deployed in mid caps. The scheme is overweight in financial services, technology, healthcare, consumer non – durable and basic engineering.
DWS Alpha Equity
DWS Alpha Equity Fund is doing reasonably well despite difficult market conditions in recent times. As against the 10% loss in the category average returns for the trailing one year, the scheme managed to remain in the positive territory with nearly 4% return in the said period. The fund did well in 2007 with 67% growth against the segment average of 59.5% and distributed dividend at the rate of 40% under the dividend option.
A large cap fund with assets under management of nearly 130 crore, DWS Alpha Equity fund maintains a large cap portfolio consisting Reliance Industries, Bharti Airtel etc and nearly 81% of its assets is in the large cap category. The fund is overweight in energy, technology, financial services, consumer non – durable and metal stocks. Chemicals, basic engineering, diversified, automobiles and services are the other areas in which the fund has some exposure. The fund started its operation in 2004 and the performance so far is good with 25% return in the first year, 31 and 49% growth respectively in the succeeding two years. However, it must be noted that these periods had been extremely good to the equity market and thus to all equity funds. It is yet to be seen as how the fund is going to fare in difficult times.
