An Open Ended Equity Fund

Fund Manager: Kenneth Andrade


The scheme aims at capital appreciation by investing in diversified small and medium size businesses with good long term potential available at cheap valuation.

Portfolio Analysis

IDFC premier fund seeks to invest in mid sized companies with growth potential over a longer term.  The fund thus holds a diversified basket of mid and small cap stocks off which some qualify for growth stocks. Notably, its compact portfolio of little over 30 stocks seems well diversified and its buy and hold strategy, augurs well for the investor.

The scheme has significant exposure in Consumer Non-Durables with over 26 per cent exposure followed by Transportation and Logistics sector stocks. Notably, the highest exposure into this (Consumer Non-Durables) space has been for more than a year.

However, some stocks in this segment namely, Gokul Refoils, Raj Oil Mills  and Globus Spirits appear unlikely to outperform in the foreseeable future.
 
There is high exposure to Auto ancillaries and Finance stocks and the aggregate of the top 4 sectors is 53 per cent of the portfolio value upto October 2009.

Over the last three years, the funds has outperformed its peers as well as the benchmark indices by generating over 25 per cent returns as compared to just 7.5 per cent returned by its Benchmark, BSE 500.

As the fund invests in companies that are emerging, it is automatically exposed to higher risks.

Investment Strategy Analysis

On the basis of its past performance it ranks amongst the better performing schemes as compared to its peers.

Risk Profile:

Standard Deviation: 10.03%
Beta: 0.90
Sharpe Ratio: NA

Outlook :  Investors with high risk appetite can consider investing into this fund at declines.

Caveats: Higher risk in as the fund invests emerging businesses. Also the fund is known to periodically curtails inflows to ensure that it remains at a manageable size.