GEM GAZE

October 2019

Many people believe that if you pick the fastest growing sector or sectors in which to invest, you get a leg up on the investing competition and can outperform the general markets. Over the long haul, you can expect sectors to move based upon the strength of the revenue growth and the demand for the products and services sold by the companies within a sector. The October 2019 GEMGAZE would provide some of the best sector mutual funds which can fetch you phenomenal returns provided you ride the cycle at the appropriate time.

The consistent performance of four out of five funds in the October 2018 GEMGAZE is reflected in the four funds holding on to their esteemed position of GEM in the October 2019 GEMGAZE. Only SBI Healthcare Opportunities Fund has been shown the exit route in view of its lacklustre performance.

Canara Robeco Infrastructure Fund Gem

Gaining on growth

Canara Robeco Infrastructure Fund, incorporated in December 2005, is a thematic fund completely focused on identifying growth-oriented companies within the infrastructure space. The fund, with an AUM of Rs 112 crore, aims at having concentrated holdings with 65.17% of the assets in the top three sectors Construction, Energy and Engineering. The fund has large market capitalization stocks at 50.01%. The scheme's fund manager avoids companies operating in segments that have high entry barriers. With a well-diversified portfolio of stocks in the energy, construction, and services sectors, 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 S & P BSE India Infrastructure TRI. Canara Robeco Infrastructure has been among the better performers in its category. The fund’s one-year return is 8.38% as against the category average return of 6.38%. In the past five years, the scheme has given 5.84% returns, while its category has given 6.23% returns in the same period. In the past ten years, the fund has given 8.05% returns, while the category has given 6.0%. The expense ratio of the fund is high at 2.59% while the portfolio turnover ratio is 95%. The fund is managed by Mr. Shridatta Bhandwaldar and Mr. Miyush Gandhi.

SBI Consumption Opportunities Fund (erstwhile SBI Magnum FMCG Fund) Gem

The triumphant topper

In the past one year, the Rs 716 crore, SBI Consumption Opportunities Fund, incorporated in July 1999, is perched at the top with 39.4% of the assets in large caps. 72.2% of the assets are in the top three sectors FMCG, Services and Textiles. The expense ratio is high at 2.43% and the portfolio turnover ratio is a mere 27%. Braving all odds, the one-year return of the fund is 4.89% as against the category average of 12.86%. Over the five and ten year periods, the fund posted 11.08% and 19.39% of CAGR, respectively as against the category average of 10.97% and 14.04% respectively. SBI Consumption Opportunities Fund is benchmarked against the NIFTY India Consumption TRI. Mr. Saurabh Pant has been managing the fund since June 2011.

ICICI Prudential Banking & Financial Services Fund Gem

Bountiful bottom line

ICICI Prudential Banking & Financial Services Fund, incorporated in August 2008, invests predominantly in large and midcap financial companies. 63.56% of the portfolio consists of large caps. This fund adopts a 'bottom-up' strategy, to identify and pick its investments across market capitalizations. The fund has not only outperformed its benchmark, the NIFTY Financial Services TRI but has also outperformed other banking sector funds. The current AUM of the fund is Rs 3,290 crores and the one-year return is 15.18% as against the category average return of 11.97%. Over the five and ten year periods, the fund posted 14.46% and 15.90% of CAGR, respectively as against the category average of 8.75% and 9.1% respectively. The expense ratio is 2.13% and the portfolio turnover ratio is 46%. The fund is managed by Mr. Roshan Chutkey since January 2018.

 ICICI Prudential Technology Fund Gem

Opportunities in the offing

Consumers’ appetite for new technologies has been driving growth in the technology sector for years. This is providing good opportunities for technology companies. ICICI Prudential Technology Fund is aRs 440 crore technology fund, which invests in large technology oriented companies. It invests in companies listed in the BSE Teck. Its portfolio has 73.9% 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 2.97% as against the category average of 6.73%. The five-year and ten-year returns of the fund are 9.04% and 17.51% as against the category average of 9.08% and 14.66% respectively. The fund is benchmarked against the S& P BSE IT TRI. The expense ratio of the fund is 2.62% while the portfolio turnover ratio is 34%. The fund is managed by Mr. Ashwin Jain since October 2016 and Mr. Sankaran Naren since July 2017. Incorporated in March 2000, this fund which is one of the oldest technology sector funds available in market has lived up to the expectation of investors over the past years and is one of the most popular in this category.