DSPBR TOP 100 EQUITY
This fund perfectly fits the definition of core portfolio holding. What it will give you is stability, both in bear and bull phase. The fund is known for its consistent returns. Its three-year and five-year trailing returns have been 14 per cent and 26.56 per cent, respectively. During bad times, the fund managed to curtail its losses effectively, too. In 2008, it shed 45.54 per cent, against the category's loss of 50.95 per cent. These numbers mean almost any kind of portfolio can be nurtured around it.
The fund likes a balanced large-cap allocation. It doesn't get influenced by sector movements and refrains from investing too much in any one sector, even during that sector's best times. At the same time, individual stocks never cross the 10 per cent mark. Even with this approach the fund manages to get the best out of hot sectors, while ensuring a sudden downfall doesn’t affect much. But, if it sees an opportunity, it will definitely go for it. Over the past one year, the fund has averaged around 39 stocks, 25 per cent accounted for by the top five holdings.
The fund's overall portfolio is strong on quality and liquidity.
| Trailing Returns | |
| Period | Return (%) |
| 1-Month | 5.29 |
| 3-Month | 3.80 |
| 1-Year | 69.16 |
| 3-Year | 13.99 |
| 5-Year | 26.56 |
Its large-cap bias doesn't allow it to take advantage of rallies in mid-cap and small-cap stocks. Like in 2009, despite the mid-cap rally, the fund had around 85 per cent invested in large-caps. While this stopped it from earning a bit more, it did provide stability. We don't have a problem with this, because the fund stays true to its character.
It's a steady large-cap fund.
IDFC IMPERIAL EQUITY
This is a steady fund. It had set out to do a particular job, which it does really well. Some might find fault with its performance during bull runs. It doesn't quite shine and stand out, but, it manages to earn returns similar to the category average. However, it shines in the hour of need. When the markets tank, when every other star fund attempts to stay afloat, this fund shows its true worth. In 2008, of the 193 equity diversified funds, it stood out by shedding the third least amount, just 41.82 per cent. The category average was 50.95 per cent. The fund is characteristically one that protects the downside very well and remains close to the category average at most times. Its 2-year and 3-year returns are better than the category average.
It prefers to keep a small and compact portfolio, with liquid names accounting for most of it. It actively churns the portfolio, going in and out of stocks, as well as sectors and takes aggressive bets, makes contrarian calls, but ensure it doesn't compromise on the quality. The downside protection ability of, here, is testimony to that.
| Trailing Returns | |
| Period | Return (%) |
| 1-Month | -5.52 |
| 3-Month | 2.85 |
| 1-Year | 60.30 |
| 3-Year | 10.08 |
| 5-Year | 21.51 |
The one place it lags is when it comes to doing well with stocks other than the top 70. However, things don't look too bad when you look at the portfolio over a cyclic period.
The fund is ideal for first-time investors, as well as seasoned ones. Its ability to shed less in bear market makes it a worthy pick.
DWS ALPHA EQUITY
You don't need to look any further if a steady, well performing fund is what you want. This one's large-cap bias and decent track record makes it good enough to be a core holding. In the past five years, it gave annualised returns of 22 per cent (as on January 31, 2010), two per cent higher than its category average. In fact, the fund outperformed its category every year, expect for 2005 and 2009.
In 2009, the fund underperformed because the manager wasn't quick enough to ride the market turnaround in March. To protect the downside, he kept the fund heavy on FMCG all through 2008. He couldn't move out of FMCG fast enough in 2009 and cash on the rally. The cash exposure, also high to protect the downside, was lowered only in May. This hurt the fund's performance in 2009.
| Trailing Returns | |
| Period | Return (%) |
| 1-Month | -3.53 |
| 3-Month | 4.23 |
| 1-Year | 62.87 |
| 3-Year | 11.95 |
| 5-Year | - |
| All data as on 31st January 2010 | |
However, it did well at other times. In 2008, it shed just 48 per cent. Change of fund manager helped. Exposure to energy was raised to 28 per cent in October 2008, from 9.4 per cent in May. Gujarat NRE Coke, NTPC, Cairn India, Grasim Industries, Aditya Birla Nuvo, Sintex Industries and other diversified stocks were added. Technology and chemicals were dropped, while exposure to metals was doubled. These changes had a superb effect on the fund's performance; it delivered 15 per cent more than its category in 2007.
The fund churn the portfolio frequently by taking aggressive stock and sector calls. However, it also manages to keep the portfolio diversified enough to ensure steady returns and delivers.