Bandhan Sterling Value Fund: Setting new benchmarks and surpassing peers

Bandhan Sterling Value Fund, launched in March 2008, has consistently been featured in the top 30 percentile of the value/contra funds category of the CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through June 2023.

The fund’s month-end assets under management increased to Rs 6,122 crore in June 2023 from Rs 2,339 crore in June 2020.

Daylynn Pinto has been managing the fund since 2016.

The scheme’s investment objective is to generate capital appreciation from a diversified portfolio of equity and equity-related instruments by adhering to a value investment strategy.

Trailing returns

The fund has outperformed both the benchmark (S&P BSE 500 Total Return Index) and its peers (funds ranked under the value/contra category in June 2023 CMFR) in the past 1-, 2-, 3-, 5-, 7-, and 10-year trailing periods.

To provide perspective, an investment of Rs 10,000 made in the fund on March 7, 2008, i.e., at its inception, would have grown to Rs 1.09 lakh on August 10, 2023, representing an annualised growth rate of 16.76 per cent. In comparison, over the same period, the same investment in the category and benchmark would have yielded Rs 68,737 (13.3 per cent per annum) and Rs 52,195 (11.3 per cent per annum), respectively.

A systematic investment plan is a disciplined method of investing offered by mutual funds, allowing investors to invest a specific amount at regular intervals.

A monthly investment of Rs 10,000 over the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 29.8 lakh (17.49 per cent annualised returns), as opposed to Rs 25.77 lakh (14.77 per cent) in the benchmark as of August 10, 2023.

Portfolio analysis

Over the past three years, the fund has maintained a similar exposure across different market capitalisations. Allocations to mid-cap and small-cap stocks averaged 34.4 per cent and 31.16 per cent, respectively, while allocations to large-cap stocks averaged 29.88 per cent.

The portfolio exhibited diversification across 52 industries, with banks holding the largest share at an average allocation of 8.64 per cent, followed by pharmaceutical (7.18 per cent), automotive components (6.7 per cent), information technology (6.66 per cent), and cement (6.25 per cent).

In the period under analysis, the fund had exposure to 111 stocks and consistently held 28 of them. Key contributing stocks to the portfolio included Deepak Nitrite, CG Power and Industrial Solutions, Magma Fincorp, Jindal Steel & Power, and ICICI Bank. CRISIL Research