With so many funds being frequently churned out, the entire mutual fund landscape is changing into exotica.
While opportunity funds, multi-cap funds, mid-cap funds and dividend yield funds gain in prominence and popularity, the good old fashioned, no-frills, diversified equity fund is getting lost in the crowd.
Finding a good, large-cap dominated diversified equity fund is no easy task.
Here are such funds that have not got carried away by the mid-cap mania, and have yet managed to deliver substantial returns.
About these funds
These are diversified equity funds which figure in the top half based on their trailing three-year returns. Trailing returns represent a fund's gains over a specified period of time, three years in this case. The Net Asset Values and the returns are as of October 7, 2005. The average three year returns of diversified equity funds is 57.77%.
They have allocated at least 60% of their assets (total investments) to large-cap stocks on an average every year since 2001.
For 2005, the average exposure to large-caps during the first six months is taken into consideration.
What makes them good large-cap funds?
There are two reasons why we believe that these are good large-cap funds.
First, if a fund did not get tempted by the mid-caps in recent times, then we see little reason why it would compromise on its large-cap orientation in future as well.
Second, with a large-cap heavy portfolio, the fund have obviously done well to remain in the top half of the category over the last three years, a time when mid-caps have been firing from all cylinders.
The following six funds have made it to our list*
DSPML Opportunities
While looking for investments that are expected to do well, the fund does not compromise on its large-cap orientation. However, it takes sectoral bets at times, making it a little aggressive.
3-year return: 67.88%
NAV: 35.06
Franklin India Bluechip
A 28.45% annualised return since its launch in 1993 speaks volumes about the fund's ability to perform. Though the fund has dipped slightly in the recent perfromance charts, that doesn't prevent it from still being one of the top picks in the category.
3-year return: 58.27%
NAV: 82.02
Franklin India Prima Plus
The fund adds a pinch of mid-cap flavour to the large cap dominated portfolio. Over the years, the fund has efficiently managed its mid-cap exposure to generate returns for its investors, while still being large-cap dominated.
3-year return: 56.02%
NAV: 82.23
HDFC Top 200
With a focus on companies mainly drawn from the BSE 200 index, the fund merits consideration in any large-cap bluechip dominated portfolio.
3-year return: 65.92%
NAV: 69.566
Kotak 30
This fund restricts its investment to nearly 30 stocks. It has always maintained a large-cap portfolio thus making it one of the least volatile funds in the category.
3-year return: 59.05%
NAV: 43.22
Principal Growth
With the allocation to large-caps just about averaging 60% for the six month period of 2005, the fund made it to our list by a very narrow margin. After a poor show in 2003, this fund made a smart comeback last year to deliver top-quartile returns.
3-year return: 56.33%
NAV: 34.46
* All the NAVs and returns are calculated as on October 10, 2005.
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