MF Maze To Matrix

GEM GAZE

October 2018

Many people believe that if you pick the fastest growing sector or sectors in which to invest, you get a leg up on the investing competition and can outperform the general markets. Over the long haul, you can expect sectors to move based upon the strength of the revenue growth and the demand for the products and services sold by the companies within a sector. The October 2018 GEMGAZE would provide some of the best sector mutual funds which can fetch you phenomenal returns provided you ride the cycle at the appropriate time.

The consistent performance of all five funds in the October 2017 GEMGAZE is reflected in all the funds holding on to their esteemed position of GEM in the October 2018 GEMGAZE.

Canara Robeco Infrastructure Fund Gem
Focus on fundamentals

Canara Robeco Infrastructure Fund, incorporated in December 2005, is a thematic fund completely focused on identifying growth-oriented companies within the infrastructure space. The fund, with an AUM of Rs 133 crore, aims at having concentrated holdings with 85.85% of the assets in the top three sectors and a bias towards large market capitalization stocks at 50.06%. Some other infrastructure schemes also invest in companies that are proxy play on the infrastructure theme. This is one of the important factors, which has helped the scheme beat its peers by a wide margin. The scheme’s fund manager avoids companies operating in segments that have high entry barriers. With a well-diversified portfolio of stocks in the energy, construction, and services sectors, it employs fundamental analysis with a focus on factors such as the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company, and the key earnings drivers. The fund benchmarks the performance of its portfolio against the S & P BSE India Infrastructure TRI. Canara Robeco Infrastructure has been among the better performers in its category. The fund’s one-year return is -12.73% as against the category average return of -8.88%. In the past five years, the scheme has given 17.39% returns, while its category has given 17.54% returns in the same period. In the past ten years, category has given 7.98% returns, while the scheme has given 11.66%. At present, the scheme is invested in companies which have relatively leaner balanced sheets, robust order book and dominant market share. The expense ratio of the fund is high at 2.49% while the portfolio turnover ratio is 32%. The fund is managed by Mr. Shridatta Bhandwaldar.

SBI Consumption Opportunities Fund (erstwhile SBI Magnum FMCG Fund) Gem
The best bet

In the past one year, the Rs 703 crore, SBI Consumption Opportunities Fund, incorporated in July 1999, is perched at the top with 52.37% of the assets in large caps. The expense ratio is high at 2.92% and the portfolio turnover ratio is a mere 58%. Braving all odds, the one-year return of the fund is 10.60% as against the category average of 3.41%. Over the five and ten year periods, the fund posted 15.29% and 23.43% of CAGR, respectively as against the category average of 16.47% and 15.92% respectively. SBI Consumption Opportunities Fund is benchmarked against the NIFTY India Consumption TRI. FMCG funds are, therefore a good bet. Mr. Saurabh Pant has been managing the fund since June 2011.

ICICI Prudential Banking & Financial Services Fund Gem
An evergreen fund

ICICI Prudential Banking & Financial Services Fund, incorporated in August 2008, invests predominantly in large and midcap financial companies. 58.42% of the portfolio consists of large caps. This fund adopts a ‘bottom-up’ strategy, to identify and pick its investments across market capitalizations. The fund has not only outperformed its benchmark, the NIFTY Financial Services TRI but has also outperformed other banking sector funds. The current AUM of the fund is Rs 2,778 crores and the one-year return is -7.64% as against the category average return of -4.44%. Over the five and ten year periods, the fund posted 23.24% and 18.96% of CAGR, respectively as against the category average of 16.13% and 13.29% respectively. The expense ratio is 2.14% and the portfolio turnover ratio is 160%. The fund is managed by Ms. Priyanka Khandelwal since June 2017.

SBI Healthcare Opportunities Fund (erstwhile SBI Pharma Fund) Gem
Consistent healthy prospects

SBI Pharma Fund, incorporated in July 1999, sports an AUM of Rs. 1108 crores. The number of stocks held by the fund in the last few months has hovered around 25. The concentration analysis reveals that the fund has around 41.19% assets allocated towards the top 5 stocks while the top 10 stocks make up around 64.29%. The one-year return of the fund is -3.02% as against the Benchmark of 2.20%. The five-year and ten-year returns of the fund are 11.34% and 16.33% as against the Benchmark of 5.59% and 13.46% respectively. SBI Pharma Fund tops the list of pharma funds across time periods. The outperformance of the fund has been quite consistent. For instance, in the last five years, the scheme’s annual returns have been better than its benchmark, the S&P BSE Healthcare TRI, almost 84% of the time. The expense ratio of the fund is 2.52% while the portfolio turnover ratio is 51%. An average large-cap slant of about 50.62% should hold the fund in good stead even during volatile times. The fund has been managed by Tanmaya Desai since June 2011.

ICICI Prudential Technology Fund Gem
Driven by growth of new technologies

Consumers’ appetite for new technologies has been driving growth in the technology sector for years. This is providing good opportunities for technology companies. ICICI Prudential Technology Fund is a Rs 459 crore technology fund, which invests in large technology oriented companies. It invests in companies listed in the BSE Teck. Its portfolio has 93.22% exposure to large cap companies. The fund seeks to invest in knowledge sectors like IT and IT Enabled Services, Media, Telecommunications, and others. The one-year return of the fund is 48.80% as against the category average of 44.28%. The five-year and ten-year returns of the fund are 18.92% and 20.99% as against the category average of 16.28% and 17.22% respectively. The fund is benchmarked against the S& P BSE IT TRI. The expense ratio of the fund is 2.88% while the portfolio turnover ratio is 14%. The fund is managed by Mr. Ashwin Jain since October 2016, Ms. Priyanka Khandelwal since June 2017 and Mr. Sankaran Naren since July 2017. Incorporated in March 2000, this fund which is one of the oldest technology sector funds available in market, has lived up to the expectation of investors over the past years and is one of the most popular in this category.