Did you know which are the 10 biggest diversified equity funds in India? These are the ones that manage the most amount of money.
Over here, we tell you what's special about each of them. Which are hot and which are not.
When looking at the returns, compare them with the average returns of diversified equity funds during that same period.
The information on portfolios is as on April 30, 2006.
Rs 5,988 crore / Rs 59.88 billion
Return: 1.97%
During: March 30, 2006 April 30, 2006
Average return: 5.46%
Recently launched, the fund is still in the process of building up its portfolio and 41% of its assets are still invested in the money market.
What's interesting?
This fund is an active player in the derivatives market (where Futures & Options are traded).
While this strategy has merit because the fund can seek to gain from an upside in the market as well as a downside, it requires exceptional management skills.
Fidelity Equity Fund
Rs 3,160 crore / Rs 31.60 billion
Return: 80.30%
During: May 18, 2005 April 30, 2006
Average return: 79.50%
The fund believes in extreme diversification, at least by the standards of others. It invests in a large number of stocks, none of which generally account for more than 4% of the total investments.
This means that if a few stocks perform exceptionally well, it will not make a significant difference but will be balanced out by the rest. For the fund to give great returns, a majority of its picks will have to do well.
On the other hand, this may help in restricting the downside.
What's interesting?
The fund fishes for unheard names. In its last declared portfolio, 9 of its stock picks were owned by no other diversified equity fund.
HDFC Equity
Rs 3,117 crore / Rs 31.17 billion
Return: 99.84%
During: One year ended April 30, 2006
Average return: 88.06%
This aggressive fund has consistently delivered a sterling performance year after year. It spots trends well in time to make the most of them. Its ability to swiftly move in and out of sectors and market capitalisations has meant that it never goes out of flavour.
What's interesting?
The fund manager invests with a lot of conviction. Around 40% of the entire portfolio is invested in the top five holdings -- which will rarely be mid- or small-cap stocks. The rest is invested in around 25 stocks. The fund manager stays committed to his stocks for a long period of time.
SBI Bluechip
Rs 3,062 crore / Rs 30.62 billion
Return: 10.19%
During: February 17, 2006 - April 30, 2006
Average return: 17.79%
This fund maintains a well diversified portfolio across 50 stocks. The investments are made in large, well-researched stocks with large market capitalisation. This is not an adventurous fund that gives sensational returns. So investors should have their expectations in control.
What's interesting?
It faces a tough competitor in the form of Franklin India Bluechip, which bears a resemblance with its name as well as investment objective.
Franklin India Flexi CapRs 3,045 crore / Rs 30.45 billion
Return: 104.71%
During: One year ended April 30, 2006
Average return: 88.06%
This fund has been one of the top performers over the last year. It maintains a portfolio of about 60 stocks, some of the most profitable being Voltas, Bajaj Auto, BHEL, L&T and Tata Motors.
What's interesting?
There is a striking similarity between this newcomer and Franklin India Prima Plus.
Both have a large-cap orientation and the freedom to invest across market capitalisations.
As per the portfolio, 24 stocks (out of a total of 53) are the same as Prima Plus. Out of its top 15 stocks, 12 are owned by Prima Plus.
Reliance Growth FundRs 2,813 crore / Rs 28.13 billion
Return: 100.56%
During: One year ended April 30, 2006
Average return: 88.06%
The fund is a consistent performer thanks to its good stock selection and smart sector bets. It generally keeps a high amount in cash to capitalise on short-term opportunities.
What's interesting?
What sets it apart from other mid-cap funds is that it invests significantly higher percentage of its assets in large-cap stocks as compared to other mid-cap funds. Since this month, it has suspended fresh investments of Rs 5,00,000 and above.
Franklin India PrimaRs 2,445 crore / Rs 24.45 billion
Return: 72.31%
During: One year ended April 30, 2006
Average return: 88.06%
Among the mid-cap funds, this one is top of the mind recall. During a bear market, it may lose more than the average return of other funds, but makes up for it during a bull run. On an overall basis, it has delivered excellent returns.
What's interesting?
The fund has stopped fresh lump sum investments but Systematic Investment Plans are allowed (these permit you to invest fixed amounts every month).
Franklin India Bluechip FundRs 2,368 crore / Rs 23.68 billion
Return: 96.88%
During: One year ended April 30, 2006
Average return: 88.06%
What's most impressive about this fund is its resolve to stock to its mandate to invest in large-cap stocks even when everyone else is running to mid-caps. But a large-cap dominated portfolio is not the only reason for its under-performance. Some of its picks have been wrong. Too much stress on energy stocks in 2004 did not work well.
What's interesting?
This remains a stable and well-diversified fund. Signs of improvement are already visible as the fund is trying to claw its way back. In the last two quarters, it has delivered returns higher than the average of its peers. During the one year period ended May 4, 2006, it delivered a three-digit return.
Reliance Equity Opportunities Fund
Rs 2,258 crore / Rs 22.58 billion
Return: 100.51%
During: One year ended April 30, 2006
Average return: 88.06%
The fund took a long time to invest in equity. Almost 15% of its portfolio was held in cash and money market instruments during this time. But the performance so far has been commendable.
What's interesting?
While it abstains from maintaining a large-cap dominated portfolio, it has delivered impressive returns because of smart stock selection. For example, this fund is among the only 5 or 6 diversified equity funds to have invested in Areva T&D India, an engineering stock that has gone up 250% in the last 11 months. Lakshmi Machine Works, Rolta, JP Associates, BHEL are other winners.
UTI Mastershare Unit Scheme
Rs 1,931 crore / Rs 19.31 billion
Return: 65.28%
During: One year ended April 30, 2006
Average return: 88.06%
The oldest diversified equity fund can be a friend during tough times. In calendar years, during which other funds delivered negative returns, this fund has managed to stay ahead of the average.
On the flip side, it lags behind during the good times.
Overall performance? Uninspiring.
What's interesting?
Till the third quarter of 2005, the fund had around 80 stocks. Now the number has been brought down to 40. The fund has become more selective rather than being the stock collector it once was. Hopefully, this would enhance returns.
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