Fidelity Equity assets top Rs 2,000 cr in August

The assets under management of Fidelity Equity Fund, India's largest equity scheme, increased 16 per cent in August over the previous month to Rs 2274 crore, according to the Association of Mutual Funds in India (Amfi) data released on Thursday. Within five months of its launch, the scheme has shown a 52.11 per cent jump in its assets.

The scheme had mopped up Rs 1445 crore through the fund offering, receiving 160,000 applications.

Boston-based Fidelity Investments is the world's largest mutual fund managing assets of over $1.2 trillion, spread across 20 million investors. Fidelity Funds Management is the Indian arm of Fidelity Investments, which currently manages the above scheme.

The rise in Fidelity Equity Fund's assets has been due to the increased appetite for equity schemes from investors and also due to the performance of the scheme, industry officials said.

The scheme has given a return of 22.77 per cent over a period of three months and 26.59 per cent since its launch in April.

A senior mutual fund official said, "The asset growth of Fidelity Equity Fund is mostly due to huge inflows in the scheme, while a minor portion is due to the appreciation in equity markets. Fidelity is a long-term player with a good performance track record."

The net asset value of the scheme was at an all-time high of Rs 12.66 on Thursday.

Unlike the industry practice of disclosing portfolios on a monthly basis, Fidelity Equity Fund follows the Securities and Exchange Board of India's guidelines of disclosing the portfolio once in six months. The mutual fund disclosed its June portfolio in August.

According to the latest portfolio disclosed by the mutual fund, the scheme had invested 11.25 per cent of its corpus in June in bank stocks. The assets of the scheme in June stood at Rs 1,495 crore.

Commenting on the fund positioning across sectors, Arun Mehra, fund manager said in the fund house's bulletin, "The fund has significant exposure to well-managed private and public sector banks as in the longer term. Increased momentum in domestic capital expenditure growth could drive an upcycle in earnings for the banking sector."

In June, the allocation to consumer durables and industrial capital goods sectors were 6.75 per cent and 6.20 per cent, respectively.

The scheme invested 9.58 per cent of corpus in June in the shares of petroleum companies while the allocation to information technology stocks was at 9.17 per cent.

"The fund has significant exposure to both the energy and utility sectors. Reliance Industries and ONGC comprise a large part of the energy sector holdings, while GAIL a gas transmission utility, is a key holding within utilities," Mehra said.

Reliance Industries, State Bank of India, ONGC, Bharti Tele-Ventures and Zee Telefilms were the top five holdings of the scheme, accounting for 23.98 per cent of its corpus in June.

On oil and gas sector, he said, "Despite short-term volatility, the fund is positive on the company in the long term as gas transmission volumes look set to rise, given the outlook showing rapid growth of gas consumption in India."

In June, the cash holding of the scheme was at 7.59 per cent of its corpus.

The minimum investment in Fidelity Equity Fund is Rs 5,000. The scheme offers growth and dividend options.

It charges an entry load of 2.25 per cent for investments below Rs 5 crore and nil for investment above Rs 5 crore.

The scheme also charges entry load of 2.25 per cent under the systematic investment plan for single instalment between Rs 100,000 and Rs 5 crore. No entry load is charged for investment above Rs 5 crore.

An exit load of 2 per cent is charged for redemption of SIP investments held for less than two years, provided no entry load was paid at the time of investment.