Mutual Funds : Good Picks
Research Desk
UTI OPPORTUNITIES
Objective and strategy
The scheme aims to reward its investors by investing in equities or related instruments. Its focus is to capitalize on opportunities arising in the market by responding to the dynamically changing Indian economy. This is achieved by moving investments amongst different sectors in accordance to changes in the prevailing trends.
Fund Manager
The fund has been managed by Mr. Anoop Bhaskar since July 2011. Earlier, it was managed by Mr. Harsha Upadhyaya since March 2007.
Performance
The fund has been doing well since 2007 and has been rated as one of the top performers in the category. On a trailing basis, the fund has been rated as the second best with annualized return of 21% for the last three years. Though the current return is negative due to ongoing difficult market conditions, the fund has managed to trim loses while compared to peers.
Portfolio
UTI Opportunities has invested 91% of its net assets in equities with a tilt towards large caps and the mid cap exposure is 25% of equity assets. Financials, FMCG and energy are the favored sectors with exposure of 48.5% of the equity portfolio.
Despite its excellent track record, it seems better to have a watch on the scheme before going for investment as the fund manager has recently changed.
Value Research rating
Risk grade – Low; Return grade - High
ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY
Objective and strategy
The objective of the scheme is to generate returns by focusing on largest 20 stocks selected from the top 200 stocks with market capitalization and are listed in the National Stock Exchange. This parameter will be followed so long as the fund size remains below Rs.1000 crore and the scheme can look for more number of stocks in its portfolio when assets under the scheme crosses the Rs.1000 crore mark. Currently, ICICI Prudential Focused Bluechip Equity Fund has over Rs.2500 crore worth of assets in its kitty and manages a larger portfolio consisting mainly giant and large cap stocks.
Fund Manager
The fund was launched in 2008 and has been managed by Mr. Prashant Kothari since then.
Performance
With the focus on the large cap, ICICI Prudential Focused Bluechip fund has been providing attractive returns for the last two years, beating the benchmark Nifty and the category average. In 2009, the fund grew 91% when the Nifty increased 76%. 2010 return at 27% also looks 9 percentage points higher than Nifty. For the trailing one year, net asset value of the fund contracted by 10% as the market declined by 18%, indicating relatively better performance of the fund.
Portfolio
The fund has 97% of its equity exposure in giant and large cap stocks and mid cap exposure is just 3%. Leading sectors in the portfolio are financials, energy and technology, constituting 53% of the portfolio exposure.
Investors with preference to large caps may go for this scheme and it appears to be one of the good picks for the long term play.
Value Research rating
Risk grade – Low; Return grade - High
BNP PARIBAS DIVIDEND YIELD
Objective and Strategy
BNP Paribas Dividend Yield aims at generating returns from a portfolio mainly consisting high dividend yield stocks. According to the scheme, high dividend stocks are defined as stocks that have dividend yield in excess of 0.5%.
Fund Manager
The fund was launched in 2005 and has been managed by Mr. Amit Nigam since 2008.
Performance
The fund has been doing reasonably well with returns better than the index returns and the category average. For the last three years, the fund has yielded annualized average return of 22%, when the average return of the category is 13% and 8% annualized return from the market for the period. Nearly 11% annualized return for the last five years is also better than the index and its peers.
Portfolio
As a multi cap player, the portfolio has been well diversified into large cap, mid cap and small cap stocks with higher exposure into large caps. Maximum exposure into any stock is not more than five percent. Energy, FMCG and financials are leading sectors in the portfolio.
Value Research rating
Risk grade – Low; Return grade – Above average
HDFC MIDCAP OPPORTUNITIES
Objective and Strategy
The scheme aims to provide long term capital appreciation by investing predominantly in mid cap and small cap stocks. To minimize the risk of holding such a portfolio, the fund has been well diversified and the holding in any individual stock has been contained below 5%.
Fund Manager
The fund was launched in June 2007 and has been managed by
Mr. Chirag Setalvad since then.
Performance
The fund started to yield positive returns in 2009 after 51% loss in the difficult year of 2008. In 2009, the fund rewarded at 94% which had been 4 per cent point lower than the category average but better than the broad market index. Beating down the category, the fund returned at 32% in 2010 while the category average return hovered around 21%.
Portfolio
The scheme has deployed its 1298 crore worth of net assets in a well diversified portfolio of stocks that have been selected from around thirteen industry segments.
Value Research rating
Risk grade – Below average; Return – Above average