After several weeks of consolidation, the Nifty touched a new closing high of 11,278 on July 27. The new peak also provides us with an opportunity to look at some mutual fund schemes which have done exceedingly well between the benchmark’s previous and current peaks. The previous high for the Nifty was at 10,452, which it touched on November 3, 2017. It means the benchmark appreciated just by 7.9 per cent. In contrast, some large-cap funds have give much better returns during the same period. We bring to you four such mutual fund schemes and their investment strategies:Invesco Large Cap FundFund manager: Amit GanatraThe scheme largely focuses on business leaders across sectors. This gives it a large-cap bias. Ganatra selects companies based on their competitive advantage. For manufacturing companies, he focuses on return on capital employed or Return on Equity. For banks, it is net interest margin and for commodity companies it is about cost leadership. Keeping these factors in mind, Ganatra have created a portfolio of well-placed large—sized companies which have delivered compounded annual growth rate of more than 15 per cent in the past 10 to 15 years. Since there has been high interest in large-sized companies in the year-to-date period, the scheme has benefited immensely from it. Companies such as HDFC Bank, TCS, Infosys, and Reliance Industries have boosted the scheme’s performance between the two peaks of the Nifty.Axis BluechipFund Manager: Shreyash DevalkarAfter a lacklustre performance for several years, Axis Bluechip is back in the reckoning in the past one year. There are a few reasons why the scheme has done well. First, the scheme’s fund manager Shreyash Devalkar who joined the scheme in November 2016 focused on quality and growth companies which was in sync with the flavour of the markets. Factors he kept in mind in selecting companies have been high Return on Equity, revenue and margin growth and penetration in market. Three sectors met these criteria. These are financials especially retail-focused banks, auto and auto-ancillaries and consumption. Besides, unlike his peer schemes, Devalkar reduced the scheme’s exposure to midcap to 6 per cent and enhanced to large-sized companies to over 90 per cent. Hence, in the past one year when mid-sized companies fell, Axis Bluechip’s returns did not fall as much as its peers.DSP Blackrock Top 100Fund Manager: Harrish ZaveriZaveri has been a stickler to quality. He hunts for stocks with strong cash flows, high ROE and secular growth. These factors have paid off quite well for the scheme. Zaveri has been bullish on private sector banks in which he has picked up HDFC Bank. In the BFSI sector, he picked NBFC like Bajaj Finance. The scheme also benefited from its exposure to insurance companies. Among the auto companies, which indicates Zaveri’s focus on consumption theme, he chose Maruti. Such diversified portfolio creation across sectors have helped the fund emerge as a winner in the past one year.Canara Robeco Bluechip EquityFund Manager: Shridatta BhandwaldarAs a fund house, Canara Robeco focuses that capture compounding stories which have visibility, sustainability, and longevity of earnings. In this, Bhanwaldar focussed largely on stories which fall under consumption theme. Due to this, the scheme’s portfolio had companies which are well-established, have strong competitive advantages in their respective sectors and entry barriers in those sectors will be high. Selecting companies based on these parameters has paid off and upped the scheme’s performance. Companies such as Maruti Suzuki, Bajaj Finance, Kotak Mahindra Bank, Britannia and L&T have enhance the scheme’s performance. Also Bhanwaldar stayed away from sectors which were draw-downs. He stayed away from sectors such as metals, telecom and PSU banks.
from The Economic Times https://ift.tt/2K7oqCE
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