Monday, October 13, 2014


October 2014

The exuberance in the Indian stock market has lent colour and vitality to mutual fund performance, with sector mutual funds in crowning glory. This dazzling performance is reflected in all five funds in the October 2013 GEMGAZE holding on to their esteemed position of GEM in the October 2014 GEMGAZE.

Canara Robeco Infrastructure Fund Gem

Praiseworthy performer

Canara Robeco Infrastructure is an open ended equity mutual fund co-launched by Canara Bank and Robeco Groep N.V. Canara Robeco Infrastructure is a thematic fund focused on identifying growth-oriented companies within the infrastructure space. The fund, with an AUM of Rs 97 crore, aims at having concentrated holdings with a bias towards large market capitalization stocks at 57%. With a well-diversified portfolio of stocks in the energy, engineering, and construction space, it employs fundamental analysis with a focus on factors such as the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company, and the key earnings drivers. The fund benchmarks the performance of its portfolio against the BSE 100 Index. Canara Robeco Infrastructure has been among the better performers in its category. The fund’s one-year return is 64.02% as against the category average return of 59.28%. The expense ratio of the fund is high at 2.96% while the portfolio turnover ratio is as low as 7%.

SBI Magnum FMCG Fund Gem

Green shoots amidst the challenge

In the past one year, the Rs 210 crore Magnum FMCG Fund, is perched at the top with 64% of the assets in large caps. Owing to its small size, the fund could stay with a compact portfolio, an advantage given the limited universe of FMCG stocks. Volumes of the FMCG companies took a blow as high living costs blighted consumer sentiment. Meanwhile, the future brightened for the beleaguered infrastructure, manufacturing and banking sectors, taking the shine off the traditional ‘defensive’ FMCG sector making it lose its status as the apple of the market’s eye. Braving all odds, the one-year return of the fund is 20.11% as against the category average of 18.57%. Over the three and five year periods, the fund posted 27.39% and 28.33% of CAGR, respectively. The expense ratio is 2.68% and the portfolio turnover ratio is 16%.

ICICI Prudential Banking & Financial Services Fund Gem

Consistency counts

ICICI Prudential Banking & Financial Services Fund invests predominantly in large and midcap financial companies. 50% of the portfolio consists of large caps. The Fund has not only outperformed its benchmark, the S&P BSE Bankex but has also outperformed other banking sector funds. The current AUM of the fund is Rs 448 crores and the one-year return is 60.01% as against the category average return of 51.26%. The expense ratio is 2.76 % while the portfolio turnover ratio is 37%.

SBI Pharma Fund Gem

In the pink of health

SBI Pharma Fund sports an AUM of Rs. 262 crores. The number of stocks held by the fund in the last few months has hovered around 15. The concentration analysis reveals that the fund has around 61.91% assets allocated towards the top 5 stocks while the top 10 stocks make up around 84.84%. The one-year return of the fund is 47.01% as against the category average of 48.77%. Given the defensive nature of pharma stocks, you can consider some investment in a good pharma fund with a consistent track record. SBI Pharma Fund scores on this count. The fund has bettered its benchmark, the BSE Healthcare index, across all time frames. The fund also raced ahead of peers Reliance Pharma Fund and UTI Pharma and Healthcare Fund over one- and three-year time periods. The expense ratio of the fund is 2.61% while the portfolio turnover ratio is 29%. A higher large-cap slant (over 75%) and lower exposure to MNC stocks should hold the fund in good stead even during volatile times.

ICICI Prudential Technology Fund Gem

Riding the boom

ICICI Prudential Technology Fund is a Rs 256 crore technology fund, which invests in large technology oriented companies. It invests in companies listed in the BSE Teck. Its portfolio has 58% exposure to large cap companies. The fund seeks to invest in knowledge sectors like IT and IT Enabled Services, Media, Telecommunications and others. The one-year return of the fund is 44.24% as against the category average of 35.55%. Over one-, three- and five-year timeframes, the fund has outperformed its benchmark (BSE IT) convincingly — to the tune of 4-9 percentage points over the long term. In the last five years the fund has managed to deliver over 25% annually, while over a 10-year period it is 21%, which compares favourably with even the best of funds from the diversified category. It has bettered peer funds such as Franklin Infotech and SBI IT. The expense ratio is 2.88% while the portfolio turnover ratio is 14%.

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