ATM :: Top equity mutual funds to play the India growth story

By Prashant Mahesh, ET Bureau | 21 Apr, 2015, 04.14AM IST | Economic Times


It is common to hear from retail investors that they have not been able to participate in the stock market rally since last year. Those investors who wanted to start buying late last year, or in early 2015, were deterred by concerns over the steep valuations. But, now with the stock market correcting from the record levels, some investors feel encouraged to dip their toes in the water. ET spoke to a few leading mutual fund analysts and wealth managers for their insights on the schemes that investors can buy into to bet on India’s growth story for the next few years.

Reliance Equity Opportunities Fund

Fund Managers: Sailesh Raj Bhan & Viral Berawala

It is a multi-cap fund that invests in stable large-sized companies and growth oriented mid- and small-sized companies. But, the fund managers handle the portfolio in a different way. They also explore battered sectors and emerging themes that have helped the fund deliver consistently. “The fund has the flexibility to invest across market capitalisations. From a long-term returns perspective, the fund continues to be among the top quartile in the multi-cap category,” said Ashish Shanker, head (investment advisory) at Motilal Oswal Wealth Management. The fund’s returns could be squeezed if thematic bets go awry.

Franklin India Bluechip

Fund Managers: Anand Radhakrishnan & Anand Vasudevan

Among the oldest funds in the country, this scheme is recommended for any person who wants to start investing in equities. The fund managers stick to large-cap stocks with good balance sheets, which has resulted in the scheme under-performing its peers in the past. “The fund’s ability to curtail volatility and falls in down markets, despite not reducing its exposure to equities like its peers do, makes it stand out in such markets,” says Vidya Bala, head of research at As a wealth manager puts it: “The scheme is best suited for an individual shifting from fi xed deposits to equities.”

Birla Sun Life Frontline Equity Fund

Fund Manager: Mahesh Patil

One of Birla’s flagship funds, the scheme has been among the top performers in the diversifi ed equity fund category. The fund has been able to grow because of its relative consistency in both good and bad times. “The fund manager changes exposure based on short-term opportunities and market sentiments,” said Nirmal Rewaria, SVP & business head – fi nancial planning, Edelweiss Financial ServicesBSE 2.13 %. This has helped the fund give superior riskadjusted returns.

Top equity mutual funds to play the India growth story

HDFC Equity Fund

Fund Manager: Prashant Jain

With about Rs 18,000-crore of assets, HDFC Equity Fund is one of the largest and oldest funds in the industry. Despite the fund size, it has managed to outperform its peers over the long run. “It has registered an annualised gain of 22 per cent over 10 years, which is amongst the highest in the category,” said Rewaria of Edelweiss Financial. Some wealth managers, however, warn that investors with an investment perspective of less than three years could be disappointed.

IDFC Premier Equity Fund

Fund Manager: Kenneth Andrade

Initially, this fund was placed in the mid-cap category. However, since 2013, many analysts categorise it under the multi-cap category. Of the lot, this fund’s investment strategy is the most aggressive because of the mid-cap exposure, helping it top performance charts. “The fund, across time periods, has a major part of its corpus concentrated into mid-caps and the fund manager’s ability in identifying stocks which have the potential to grow big have been the biggest positives for this fund,” said Renu Pothen, head of research at iFAST Financial. Under-performance in mid-caps could impact the fund’s performance.

ICICI Prudential Focused Bluechip

Fund Manager: Manish Gunwani

The fund has churned annual returns of 17.56 per cent since inception in 2008 against 8.77 per cent by its benchmark. “The fund’s approach of building a focused portfolio and sticking to its bottom-up stock picking have helped deliver superior performance,” said K Joseph Thomas, head – research & advisory, Aditya Birla Money. “Valuations in the mid- and smallcap space are relatively stressed as compared to large-caps. With earnings set to pick up in the next few quarters, the large-cap space is set to be a major benefi ciary,” said Ashish Shanker of Motilal Oswal Wealth Management.

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