An Open Ended Equity Growth Fund
Fund Manager: Asit Bandarkar
Date of Allotment: July 2005
The primary investment objective of the scheme is to seek long term capital appreciation from investment in a portfolio of stocks across all market capitalization range. The portfolio will include mainly those companies operating in emerging sectors of the economy or companies which exhibit potential to become leaders of tomorrow.
Portfolio Analysis
The Fund has invested in diversified stocks in the small and mid caps space that it perceives to have potential to become blue-chips. This increases the risk when compared to any other large cap diversified scheme.
The fund has highest exposure in Software sector followed by Industrial Capital Goods, Transportation, Pharmaceuticals and Consumer Non-Durables. While the scheme has outperformed in the last one year, its performance over a longer time frame hardly inspires.
Peer Group Comparison
| Scheme Name | 1 mth % | 6 mths % | 1 year % | 3 years % | NAV | Sharpe Ratio | Beta | | Principal Emerging Bluechip Fund | -4 | 33 | 150 | NA | 28 | NA | NA | JM Emerging Leaders Fund | -9 | 26 | 138 | -10 | 8 | -0.01 | 0.83 | SBI Magnum Emerging Businesses | -3 | 30 | 132 | 2 | 33 | -0.2 | 0.99 | Canara Robeco Emerging Equities | -5 | 26 | 128 | 4 | 18 | -0.22 | 0.75 | ICICI Prudential Emerging STAR Fund | -2 | 31 | 122 | 0 | 30 | -0.23 | 0.86 | Kotak Emerging Equity Scheme | -5 | 25 | 91 | NA | 10 | -0.23 | 0.77 | BSE Sensex | -8 | 7 | 68 | 4 | -- | | |
Returns as on 11th February, 2010.
However one may also do well to note that Emerging Funds have done well and outperformed the broader indices and large cap schemes only in the last one year. If one observes the 2-3 year performance, they have been underperformers, as most of them are hi-beta in nature.
Further, a negative Sharpe ratio indicates a risk –reward ratio which is highly skewed towards risk.
Outlook : Those looking for investments in small and mid-cap stocks could bet on a fund with a longer track record and not get carried away with just the near term track record of the fund. One may consider exiting the scheme for now.
Caveats : Negative Sharpe ratio and dismal performance over a longer time horizon.
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