DSPBR TOP 100 EQUITY
In 2009, this fund could not take advantage of the mid-cap rally because of its mandate to have a large-cap bias. It had around 85 per cent in large-caps, which didn't allow it to earn more than it did, but provided stability. It may not give you earth-shattering returns, but it will definitely not let you down in the long-term.
A perfect core holding, this fund is a stable performer. It has shown its mettle in bull and bear phases. Its three- and five-year returns have been 12 and 25 per cent, respectively. During bad times, the fund has managed to curtail its losses effectively. In the bear phase of 2008, it shed just 45.54 per cent, against the category’s loss of 50.95 per cent. These numbers show that this fund can be the core of any portfolio.
A balanced large-cap allocation defines the fund’s portfolio. The fund manager does not get influenced by sector movements and refrains from investing too much into any particular sector, even during the best times. At the same time, individual stocks never cross the 10 per cent mark. However, even with this approach, the manager gets the best out of hot sectors, while ensuring a sudden downfall won't affect. But he goes for opportunities. Over the past year, the fund has averaged around 39 stocks, 25 per cent of it accounted for by the top five holdings. Overall, the portfolio is strong on quality and liquidity.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 9.57 |
| 6-month | 12.58 |
| 1-year | 22.84 |
| 3-year | 13.85 |
| 5-year | 24.82 |
A steady large-cap fund, good at what it's supposed to do.
IDFC IMPERIAL EQUITY
If you want a fund that might not be in the limelight at all times, but will outshine its peers when it really matters, then this one's the right choice. In 2008, of the 193 equity diversified funds that form its category, it shed the third least amount - 41.82 per cent (category average 50.95 per cent).
The fund not only stays afloat when everyone else is struggling, it also manages to mirror the category average. This is the fund's inherent character: protects the downside and earns at par with the category. Its two- and three-year returns are better than the category’s.
The fund manager prefers to keep a small and compact portfolio, with liquid contributing the most. He actively churns the portfolio, going in and out of stocks and sectors. He'll take aggressive bets, make contrarian calls, but ensure he doesn't compromise on quality. The downside protection abilities of the fund is a testimony.
However, the fund lags when it comes to doing well with stocks other than the top 70. Again, things don't look too bad when you look at the portfolio over a market cycle. On the way up, the fund's beta tends to be 1, but is cut on the way down.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 9.67 |
| 6-month | 11.65 |
| 1-year | 19.75 |
| 3-year | 13.05 |
| 5-year | - |
Overall, the fund is good for both first-time and seasoned investors. As it sheds less in bear markets, with a steady performance, makes it a worthy pick.
TATA EQUITY PE
Since 2007, it has been one of its category's better performers. It delivered an impressive 84 per cent (category average 60 per cent) due to bold sector allocations - metals, energy and financials. Next year, the fund shed in-line with the category. The fund managers may cast their lot with out-of-favour sectors. In 2008, the fund went against the tide with bold bets in metals, services and financials. Within metals, the managers bought stocks that were not highly leveraged and had cash on books. Similarly, for financials, they picked stocks where dividend yield and low price-to-book ratio was a cushion.
In 2009, the fund beat the category by an impressive 21 per cent. This outperformance was achieved by lowering cash to just two per cent by June and a timely move was made into technology, specially tier-II companies, between May and August. Large-cap exposure also dropped and the fund capitalised on the mid-cap rally.
By its mandate, the fund invests at least 70 per cent of its net assets in stocks that have a trailing price-to-earning (PE) - less than that of the Sensex at the time of investment. But the fund is not totally value-based. The fund managers gravitate towards low PE stocks, but this does not translate into them offloading when it goes up. They have a free hand with the balance 30 per cent.
| Trailing Returns | |
| Period | Return (%) |
| 3-month | 9.38 |
| 6-month | 13.22 |
| 1-year | 29.38 |
| 3-year | 14.79 |
| 5-year | 21.65 |
The fund's diverse portfolio won't see much aggression with individual stocks, though strong sector exposures have been the norm. They go wherever they find value. This makes the fund a good pick.
