The last five years have seen an influx of new investors into mutual funds, and systematic investment plans (SIPs) have emerged as a popular vehicle for investing savings in equities. Among the diversified, actively-managed equity mutual fund schemes, the ones that delivered the best returns were focused on growth and quality. They invested in companies with earnings visibility, had the flexibility to move across large and midcaps and were overweight on private sector banks. Here’s a look at five such schemes:
Axis Bluechip Fund
5-year SIP returns: 15.57%
Fund manager: Shreyas Devalkar
Top 3 holdings: HDFC Bank, Reliance, ICICI Bank
Assets under management: Rs 9,481 crore
A core fund in the large-cap portfolios of many investors, the scheme has been one of the best performers in the actively-managed space. The fund focuses on big Indian companies and has stuck to high-growth companies, with an eye on quality. It has comfortably beaten its peers and benchmark over the last five years, topping the category charts. Being overweight on financials, underweight pharma & healthcare, staying away from PSU banks, and holding some cash in the portfolio have helped the fund emerge as a winner.
AXIS Focused 25 Fund
5-year SIP returns: 15.25%
Fund manager: Jinesh Gopani
Top 3 holdings: Bajaj Finance, Bajaj Finserv, Reliance Industries
Assets under management: Rs 8,891 crore
The fund manager has a concentrated portfolio of high-conviction ideas with 25 stocks. Companies that are included in the portfolio have the capability to go through their business cycles without being affected by short-term market volatility. The fund has a core portfolio of 50-60% that consists of stocks which are steady compounders with low volatility, another 20-25% consists of alpha generators bought with a horizon of 18-24 months and the balance 25% is allocated to emerging themes with a long-term time frame.
IIFL Focused Equity Fund
5-year SIP returns: 14.71%
Fund manager: Mayur Patel
Top 3 holdings: ICICI Bank, HDFC Bank, Axis Bank
Assets under management: Rs 476 crore
Financial planners believe this fund suits risk takers eyeing high-conviction bets. The fund manager builds a portfolio of 25-30 high-conviction stocks, with no restrictions on sector exposure. The focus while buying the stocks is on investing in businesses with strong earnings growth, cash generating capital-light business model, high return on capital employed, high return on equity and attractive valuation relative to its peers. The fund is currently overweight on financials, technology and healthcare.
SBI Focused Equity Fund
5-year SIP returns: 13.69%
Fund manager: R Srinivasan
Top 3 holdings: HDFC Bank, SBI, Bajaj Finance
Assets under management: Rs 6,526 crore
The fund manager runs a concentrated portfolio with 20-25 stocks, with the top 10 accounting for 60% of the portfolio. Currently, the scheme has allocated about 60% funds to large caps, and the balance is in mid- and small-caps. Known in its earlier avatar as SBI Emerging Business, the scheme has beaten its benchmark over time frames of 1, 3, 5 and 10 years. Managed by R Srinivasan for the last decade, the fund is benchmark-agnostic and overweight on financials, FMCG and engineering, and underweight on technology and automobiles.
Mirae Asset Emerging Bluechip Fund
5-year SIP returns: 15.40%
Fund manager: Ankit Jain/Neelesh Surana
Top 3 holdings: HDFC Bank, ICICI Bank, SBI
Assets under management: Rs 9,229 crore
The fund invests in a mix of large- and mid-cap companies. It currently has a 55% exposure to large caps and the balance is in mid- and small-caps. One of the top-performing consistent schemes, it does not accept lump sum investments. The money flows into the scheme only through the SIP route. It has beaten its benchmark consistently over periods of 1, 3 and 5 years. The fund management, spearheaded by Neelesh Surana, is a stickler for quality management, strong cash flows and high return rations. Financial planners recommend this to investors using the SIP route with a time frame of 5 years and above.
( Originally published on Dec 30, 2019 )