‘Only when the tide goes out do you discover who’s been swimming naked.’
This is one among the many pearls of wisdom that is often attributed to legendary investor Warren Buffett. The current fall in the market has caught many market participants offguard. While the retail investor is known to be at the receiving end of every market decline, how have the so-called market experts and star fund managers performed?
Have they been able to catch the change in tide?. Keeping in mind that the BSE Sensex has fallen by 16.21 per cent, we take a look at how the top schemes in some of the top funds have performed. We shall look at how the top equity schemes of top three asset management companies (AMC) with assets under management (AUM) of over Rs 100,000 crore have performed.
HDFC Mutual Fund
The largest fund house in the country manages over Rs 1.78 lakh crore in December 2015 and manages one of the largest equity portfolios in the country. Its top two funds HDFC Equity Fund and HDFC Top 200 Fund manage over Rs 25,000 crore. Unfortunately both have done worse than the market. HDFC Equity Fund has given a negative return of 19.09 per cent in the last one year as per data by Value Research while the Top 200 Fund has given a negative return of 18.66 per cent.
HDFC Equity Fund scheme is ranked 188 out of 191 schemes by the website in its category of Equity Multi Cap while Top 200 Fund scheme is ranked 124 out of 128 funds. A look at the portfolio of the Equity Fund scheme makes it clear why the fund performed so poorly. Its second largest holding is SBI. ICICI Bank, Maruti and L&T form the next three top holdings. These four stocks accounted for nearly 28 per cent of its holding and have taken a massive beating in the recent fall.
ICICI Prudential Mutual Fund
At Rs 1.72 lakh crore, ICICI Prudential is the second largest mutual fund in the country. Its top two equity schemes Value Discovery Fund and Focussed Bluechip Fund manage around Rs 20,000 crore of client money. Value Discovery Fund has given a negative return of 8.30 per cent over the last one year and is ranked 54th out of 191 schemes in the Multi Large Cap category maintained by Value Research Online. Focussed Bluechip Fund has given a negative return of 12.53 per cent and is ranked 38th of 128 schemes in its Large Cap fund.
Though, the Focussed Bluechip Fund has three banks in its top five holdings, its largest holding in HDFC Bank helped the fund perform relatively better.
Reliance Mutual Fund
Reliance Mutual Fund is the third largest fund house in the country with an AUM of Rs 1.56 lakh crore. Its top two schemes Equity Opportunities Fund and Growth Fund manage close to Rs 17,000 crore of assets.
Both the funds are classified in the mid cap category but relative to other mid cap funds have performed poorly. Equity Opportunities Fund is ranked 76th out of 78 schemes in the category and has given a negative return of 14.51 per cent while Growth Fund with a negative return of 11.52 stands at 66th position out of 78 schemes.
Top three holdings of Equity Opportunities Fund are banks, with HDFC Bank being the top holding followed by SBI and ICICI Bank accounting for over 15 per cent of the total funds as per information on the schemes website.
Going back to Warren Buffett’s quote mentioned at the start, we know where our top fund managers stand.