GEMGAZE

July 2021

All the GEMs from the 2020 GEMGAZE have performed reasonably well through thick and thin and figure prominently in the 2021 GEMGAZE too. 

HDFC Midcap Opportunities Fund Gem

A silent consistent performer over the years, the Rs. 29,508 crore HDFC Mid-Cap Opportunities Fund, launched in June 2007, has made its name among consistent performers in the mutual fund arena. This fund is an open ended scheme managed by star fund manager Chirag Setalvad since inception. HDFC Mid-Cap Opportunities Fund invests 86.07% in a mix of mid-caps and small-cap stocks. HDFC Mid-Cap Opportunities Fund holds a well-diversified equity portfolio with the top three sectors, Finance, Chemicals and Engineering constituting 48.15% of the portfolio. None of the holdings have an exposure of over 5% in the portfolio. Out of the 69 stocks in the portfolio, the top 5 holdings command an allocation of 22.77%. Over the past five years, HDFC Midcap Opportunities Fund has taken a lead over the benchmark right from the very beginning. The five-year and ten-year returns of the fund are 15.49% and 17.61% as against the category average of 15.57% and 17.12% respectively. In terms of long-term performance, HDFC Opportunities Fund has generated strong returns in the market rallies of the past and has been able to restrict losses in a bear market. Its return since inception is 16.34%. The fund is benchmarked against the NIFTY Midcap 100 TRI. The expense ratio is 1.76% and the turnover ratio is a meager 10.22%. 

ICICI Prudential Bluechip Fund (erstwhile ICICI Prudential Focused Bluechip Fund) Gem

Among mutual fund schemes that have singular focus on large-sized companies, the Rs. 27,723 crore ICICI Prudential Bluechip Fund has distinguished itself by consistently beating its benchmark and peers by a reasonably good margin. The fund has traditionally had a higher-than-category allocation to large caps (92.14% at present). Its mandate earlier called for a concentrated portfolio, with the stock picks drawn from the top 200 stocks by market cap. Post SEBI reclassification, the fund is repositioned as a pure large-cap fund. This will not materially change its risk or return profile, given that the market-cap range is practically the same. The 'focused' approach has been dropped from the mandate. It holds a well-diversified equity portfolio with the top three sectors, Finance, Technology and Energy constituting 59.69% of the portfolio. Out of the 59 stocks in the portfolio, the top 5 holdings command an allocation of 37.76%. This is in any case a positive, given that the fund's burgeoning size made a very compact portfolio difficult. The only limitation to assessing this fund is that despite its consistent show in the last thirteen years, it has not seen a serious bear market since inception in May 2008. In 2011 and in 2015, it managed to contain downside well relative to the market. The fund has been managed by Rajat Chandak since July 2017, Anish Tawakley since September 2018 and Vaibhav Dusad since January 2021. In the past five- and ten-year periods, the scheme has delivered 13.73% and 13.16% returns, while the category average has been 13.96% and 11.76% in the same period, respectively. The fund is benchmarked against the NIFTY 100 TRI. The expense ratio is 1.73% and the turnover ratio is 15%. Investors looking to invest in an ‘all-weather’ and ‘true to-its-label’ large cap portfolio can consider investing in this scheme. 

DSP Equity Opportunities Fund (erstwhile DSPBR Equity Opportunities Fund) Gem

A very steady performer in the multi-cap category, this Rs. 6,515 crore fund, incorporated in May 2000, is a flexi-cap fund with no pre-defined market capitalization limits. The fund had a bias towards large caps. But, in recent times, the fund has maintained a 56.69% plus large-cap exposure, with mid-cap stocks at about 43.31%. It holds a well-diversified equity portfolio with the top three sectors, Finance, Construction and Technology constituting 52.05% of the portfolio. Out of the 60 stocks in the portfolio, the top 5 holdings command an allocation of 28.59%. The expense ratio is 1.93% and the turnover ratio is 70%. The fund has been managed by Rohit Singhania since June 2015 and Charanjit Singh since January 2021. In the past five- and ten-year periods, the scheme has delivered 16.16% and 14.58% returns, while the category average, has been 14.74% and 14.41% in the same period, respectively. The fund is benchmarked against the NIFTY Large Midcap 200 TRI. The scheme has been a consistent outperformer in recent years.

Axis Bluechip Fund Gem

Axis Bluechip Fund has been one of the most consistent diversified equity funds since its inception in January 2010. This fund has generated significant alpha when compared to the category over a decade with a return of 14.33% as against the category average return of 11.76%. Its five-year return is 16.4% as against the category average return of 13.96%. The fund is benchmarked against the NIFTY 50 TRI. Good performance resulted in assets expanding to over Rs 28,233 crore. With 95.5% of the portfolio in equities, the fund has a bias for large cap growth oriented stocks. Large cap stocks account for 98.95% of the portfolio value at present. In terms of sector allocation, the portfolio has a bias towards sectors like Finance, Technology and Services which comprise about 61.63% of the portfolio value. In terms of company concentration, the fund is fairly well diversified, with the top 5 companies, Infosys, HDFC Bank, Bajaj Finance, ICICI Bank and Tata Consultancy Services accounting for only 41.92% of the portfolio value. The fund has around 36 stocks in the portfolio. The expense ratio of the fund is 1.77% and turnover is 48%. The fund has been managed by Shreyash Devalkar, well-known for his deftly managed investment strategy, since November 2016.

Mirae Asset Largecap Fund Gem

Mirae Asset Largecap Fund has been one of the most consistent diversified equity funds since its inception in April 2008. This fund has generated significant alpha when compared to the category over a decade with a return of 15.55% as against the category average return of 11.76%. Its five-year return is 15.99% as against the category average return of 13.96%. Good performance resulted in assets expanding to over Rs 25,721 crore. With 98.6% of the portfolio in equities, the fund has a bias for large cap growth oriented stocks. Large cap stocks account for 86.58% of the portfolio value at present. In terms of sector allocation, the portfolio has a bias towards sectors like Finance, Technology and Energy which comprise about 62.35% of the portfolio value. In terms of company concentration, the fund is fairly well diversified, the top 5 companies, HDFC Bank, Infosys, ICICI Bank, Reliance Industries and Axis Bank account for only 40.17% of the portfolio value. The fund has around 58 stocks in the portfolio. The expense ratio of the fund is 1.62% and turnover is 24%. The fund has been managed by Harshad Borawake since May 2017 and Gaurav Misra since January 2019. But a steady management team manages the fund with style continuity. Mirae Asset Largecap Fund has built a strong reputation as a wealth creator for its investors.