6 months
1 year
2 years
Prudential ICICI FMCG
32.69
56.27
128.44
63.2
Alliance Buy India Fund
26.41
45.26
113.15
78.57
Franklin FMCG Fund
26.34
36.48
84.66
41.9
UTI Growth Sector Fund - Brand Value
18.21
20.76
63.56
47.07
SBI Magnum Sector Umbrella - FMCG
20.11
24.89
62.45
46.91
BSE FMCG index
21.75
28.21
67.54
21.47
What is your overall portfolio strategy?
We focus on giving returns in line with the risks we take on the books. As our assets under management (AUM) have increased, we have diversified our portfolio, minimising risk to a large extent. We look at companies that have been able to report good and sustainable growth in revenues and bottomline apart from having a good management. Comfortable valuations are a key parameter as well.
Paint companies like Asian Paints and Goodlass Nerolac find a prominent place in your portfolio. What is your outlook on the sector?
Compared to other FMCG segments, paint companies have recorded a higher rate of growth. Companies in the sector have managed to grow at a rate of 10-12 per cent. Segments like soaps, shampoo, etc. won't be able to record that level of growth. Apart from this, companies in the paint sector have a good brand name. Also the market is pretty stabilised, which means there won't be much change in market-shares going forward.
| PORTFOLIO | |
| AUM = Rs 50.84 crore (as on July 29, 2005) | |
| Company | % of net assets |
| Asian Paints | 8.28 |
| Godrej Consumer | 8.02 |
| Dabur India | 7.90 |
| Champagne Indage | 7.51 |
| Goodlass Nerolac Paints | 7.20 |
| Trent | 6.95 |
| Gillette India | 6.76 |
| Pantaloon Retail | 6.69 |
| ITC | 6.12 |
| Bata India | 5.88 |
| Pidilite Industries | 5.06 |
| Radico-Khaitan | 4.89 |
| Agro Dutch Industries | 3.90 |
| Essel Packaging | 3.41 |
| ICI | 2.64 |
| Procter and Gamble Hygiene & Healthcare | 2.37 |
| Dwarikesh Sugar Industries | 2.12 |
| Heritage Foods | 1.35 |
| Jindal Photo Films | 0.86 |
| Marico Industries | 0.01 |
| Source: mutualfundsindia.com | |
Are you looking at stocks from the mid- and small-cap segments?
We are always focused on the risk-return trade off in our funds. So we are not, too, worried about investing according to market capitalisation segments. If we feel that a company is fundamentally sound and has attractive valuations we will invest in that company, irrespective of its market capitalisation.
What is your outlook on the FMCG sector?
Except last year, FMCG firms have been able to record good growth. However, we have to keep in mind that consumption levels were not high. That situation is now changing and we are seeing an uptrend in consumption patterns across the country. Volume growth is happening across the FMCG segment, whether it is paints, soaps, shampoo, etc. Penetration levels in India are also low compared to that in developed countries like US and UK.
So there is a huge opportunity waiting to be tapped by FMCG companies. Besides urban consumption patterns, factors like the monsoon are also driving the FMCG growth in India. Major companies derive half of their revenues from the rural segment, which is mainly dependant on the monsoon. Considering all these factors, FMCG companies should be able to grow fast for the next several years.
What kind of returns can investors expect from your fund going forward?
One has to keep in mind that FMCG companies can't perform miracles overnight. I expect them to post a growth of 12-15 per cent going forward. Keeping that mind, investors can expect 15-20 per cent returns from Prudential FMCG Fund on a long-term basis.