Sticking to a focused equity
portfolio, which picks profitable ideas across market capitalisation with strong conviction, serves as a good
investment option for investors in present market conditions. One such fund that is a good bet for mutual fund investors is SBI Focused Equity, which is managed by R Srinivasan.
This is one of the few early focused-equity schemes in the markets. The portfolio has 25 stocks of which top 10 form 48.6% of the total portfolio. This shows the level of conviction of the scheme’s fund manager. It is a well-diversified portfolio covering sectors such as financials, consumer durables, automobiles, technology and engineering. Close to 57% of the scheme’s portfolio is invested in large-sized companies while remaining is spread across mid-and small-sized companies.
Such conviction bets show desired results especially in the long term. This is reflected in the performance of the scheme in the long duration. In the past seven- and 10-year periods, the scheme has given 16.8% and 24.7%, while other schemes in this category have given 14% and 17.6%, respectively, during the same period, while its benchmark index, Nifty 500 TRI, has given 13.2% and 16.4%
returns. This scheme would work for investors who believe in the power of benefiting from patient investing which pays off when bets are based on high conviction.
Portfolio change (past 6 months)
| New entrants |
Complete exits |
Increase in allocation |
| Adani Ports |
AU Small Finance Banks |
Bluestar, Bajaj Finserv |
| Bharat Heavy Electricals |
Agro Tech Foods |
Dixon Technologies, Kotak Mahindra |
|
Westlife Develp |
Sheela Foam, SBI, Interglobe Aviation |
|
|
Bharti Airtel, HDFC Bank |
Returns (in %)
| Period |
CAGR return |
SIP CAGR Return |
Equity Focused Fund
-AVG CAGR Return (%) |
| 1 year |
-6.57 |
-7.53 |
-9.18 |
| 3 year |
13.19 |
8.58 |
12.04 |
| 5 year |
18.72 |
11.86 |
16.25 |
Returns peer comparison ( in %)
| Scheme |
1-year |
3-year |
5-year |
| SBI Focused Equity Fund |
-6.57 |
13.19 |
18.72 |
| Mirae Asset India Equity Fund |
-2.99 |
16.47 |
19.42 |
| Principal Multi Cap Growth Fund |
-10.39 |
15.37 |
17.65 |
Source: Accord Fintech, compiled by ETIG Database
Expert Take
KAUSTUBH BELAPURKAR,
Director (fund research), Morningstar India
The fund is a concentrated high conviction strategy investing across the capitalisation curve. R Srinivasan is an excellent stock-picker and runs a benchmark-agnostic strategy both at stock and sector levels. He focuses on investing in high growth stock and doesn’t mind paying a premium for growth. He also invests a portion of his portfolio in value plays which he believes are trading at a significant discount to their intrinsic value.