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Out Performers |
Unlike the Laggard’s list, this is a list that many fund managers would aspire their funds to feature in. And it is the toughest to get in here. We ran a simple screener on open-ended growth schemes of the diversified equity category and sorted them on the Year to Date (YTD) returns delivered by them upto March 7. A considerable number of these funds are extremely small, managing a corpus of less than Rs 50 crore. Also it shouldn’t come as a surprise that all the 20 funds featured here are large cap oriented.
UTI Variable Investment managed to loose the least returning a YTD return of (-) 14.9 per cent. As the name suggests the fund’s asset allocation is dynamically managed, while the fund’s equity component is passively managed. Between December 2007 and February 2008 the fund’s equity allocation averaged 68.92 per cent. The other two asset allocation funds in the list, namely HSBC Dynamic Fund and ICICI Prudential Dynamic too made accurate asset allocation calls and found a place in this list. By February end HSBC Dynamic was sitting on 24 per cent cash and a 66 per cent equity allocation.
Apart from these asset allocators, there are many other diversified equity funds in this list that were sitting on an unusually large proportion of cash by end December itself. The most prominent amongst these are Escorts High Yield Equity Plan, Quantum Long-Term Equity Fund and Sahara Wealth Plus Fund. Other than these three, Canara Robeco Fortune ’94, HSBC Equity and Standard Chartered Imperial equity fund too decided to liquidate a considerable portion of their holdings in January, when equity markets began to tumble. HSBC Equity infact was seen hunting for bargains in February as it upped its equity exposure again in February.
We must add here that this trend can be a little misleading, for cash calls are not the certain key to success in a market like this. Take Birla Mid cap for example, even though the fund was sitting on 21.28 per cent cash at the end of December 2007 and deployed most of this in January 2008 and then some in February, it still figures in the bottom quartile with a YTD return of (-) 29.82 per cent as of March 7. Being a mid cap fund, it has had to take a severe beating in this market.
Templeton India Equity Income, UTI Equity, Fidelity India Growth and HDFC Top 200 managed to follow a strictly diversified approach maintaining a large number of scrips (53-70) in their portfolios. The top five holdings of these funds accounted for 24-27 per cent of AUM. Quantum Long Term Equity, a much smaller fund, was also considerably diversified with top five holdings accounting for 20.85 per cent of AUM.
Reliance Industries Ltd featured as the top holding of as many as six funds in this list. The scrip lost (-) 14.54 per cent between December 31 and February 29.
In terms of sector concentration, these funds were again well diversified. The top five sector exposure for these 15 funds (where equity exposure is considerable) averaged to 54 per cent through February. Amongst the top sectors, the banking or financial services sector was the most prominent amongst these out- performers, followed by the Oil & Gas, Petroleum and Refinery sector.
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