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| Three funds worth noting |
| BS Reporter / Mumbai Sep 13, 2009, 00:32 IST |
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DSP BR EQUITY
Since 2003, this fund has beaten the category average every single year. Its charm lies in the fact that it has impressed during both favourable and unfavourable market conditions.
Its performance in 2007 was impressive, at 70 per cent (category average: 59 per cent)..
In the bear phase spanning January 8, 2008, to March 9, 2009, it shed 49.5 per cent (category average: 55 per cent). But when the market began to rise in March 2009, the fund was not quick in lowering his cash allocation and did so mainly in May. Neither was it heavy on construction, metals or financials, which boomed during that time. As a result, the fund delivered 79 per cent (category average: 89 per cent) between March 9 to August 31, 2009.
The number of stocks has gone up considerably, too, peaking at a high of 90 (August 2008), while it has averaged at 73 in the past one year.
The fund does take short-term bets and in the long-term holdings, intermittent profit booking does take place.
HDFC TOP 200
We like this fund for its solid long-term record and skilled management. Its historical performance has been impressive, but its performance in recent years has got investors worried. In 2006, it was a very average performer, due to a high exposure to defensives. In 2007, its category underperformance was a result of wrong sector moves.
But ever since Prashant Jain took over in early 2002, the fund shed less than the category average in all declining quarters, barring June 2004, when the fall was in line with the average. The fund’s success in standing upright in a bear market such as 2008, without resorting to debt or high cash levels, is a testimony to the fund manager’s proficiency and skill. In the recent rally (March 9, 2009 -- August 31, 2009), the fund gained a striking 102 per cent (category average: 89 per cent).
In the past three years no sector and stock has crossed the 27 per cent or 10 per cent threshold, respectively. The number of stocks also rose to touch a high of 65 (April 2009).
Those comfortable with a well-diversified, large-cap oriented portfolio that contains the downside should consider this fund.
RELIANCE GROWTH
Sunil Singhania has done an excellent job of managing a huge corpus and delivering admirably. In the 13 years of its existence, this fund has underperformed the annual category average just twice (1998 and 2000).
One would expect a fund with a preference for smaller companies to crash in the carnage of 2008. Not so. Its fall of 54 per cent was not too harsh in comparison with other funds and was in line with the specific category average. What came to the fund’s rescue were the aggressive cash calls, exposure to derivatives and a highly diversified portfolio. Apart from metals, none of the sectors accounted for more than 10 per cent of the portfolio (January 2008).
In the July portfolio, the fund manager was most concentrated on financials, with an 11 per cent exposure to the sector, up from 7 per cent in March 2009. Software followed at 7.41 per cent, with picks like HCL Technologies, Infosys and Financial Technologies India.
Investors looking for a mid-cap offering that delivers but does not compromise on risk should consider this option.
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