Download Mutual Fund Application Forms
Multi-cap funds provide investors a benefit of investing across market capitalisations - be it large caps, mid caps or small caps. Their investment mandate does not restrict them to invest in only a specific market cap segment, which thus provides them an opportunity to create wealth by delivering alpha returns. Moreover, they are not confined to one particular style of investing, which allows them to follow a value, growth or blend style of investing. While undertaking their stock picking activity too they can follow a bottom-up as well as a top-down approach for investing across capitalisations. Hence given that, the fund managers' of multi-cap funds very often actively engage in portfolio churning (to take exposure to the opportunities in respective market segment(s)) with an objective of creating wealth.
Bharti AXA Equity Fund (BAEF) is one such open-ended multi-cap equity oriented fund from the stable of Bharti AXA Mutual Fund, which follows a blend style of investing. BAEF is mandated to invest in equities and equity-related instruments across capitalisation, along with debt and money market instruments. Launched in October 2008, the fund has been in existence for a little over 3 years now.
The fund's primary investment objective is "to generate income and long-term capital appreciation through a diversified portfolio of predominantly equity and equity-related securities including equity derivatives, across all market capitalizations. The Scheme is in the nature of diversified multi-cap fund. The Scheme is not providing any assured or guaranteed returns. Further, there can be no assurance that the investment objective of the scheme will be realized."
The fund is mandated to invest 65% - 100% of its total assets in equity and equity-related securities (across capitalizations) - including investment in derivatives upto 50% of net assets of the portfolio, and the rest (upto 35%) in debt and money market instruments to manage its liquidity requirements.
While undertaking its stock picking activity, BAEF follows top-down approach to shortlist stocks for the portfolio construction. Under the top down process BAEF aims to look at the global and Indian economy and the domestic policy environment along with stock valuations. This would thus result in identification of themes which have a potential to outperform. The final stock selection process would also include the bottom-up approach wherein stocks from the short listed themes would be picked up based on valuations.
Equity Portfolio
BAEF believes in having companies with sustainable business models, along with those which have the potential for capital appreciation. However it imbibes in it the flexibility to pursue opportunities across the entire market capitalisation spectrum, from smaller companies to well-established large-cap companies, without having any bias in favour of sectoral allocations, or market capitalisation. However, as per the latest disclosed portfolio as on October 31, 2011, the fund has allocated majority of its corpus to large cap stocks which form 89.1% of its portfolio. Mid and small cap stocks account for 7% of the portfolio while the debt and cash component is 3.9%.
Being benchmarked to the S&P CNX Nifty index, BAEF's latest portfolio (i.e. as on October 31, 2011) constitutes of 41 stocks, where the top-10 stocks account for 55.6% of the portfolio while the top-5 sectors account for 51.1% of its portfolio. However a noteworthy point is BAEF indulges in very aggressive churning (as revealed by its portfolio turnover ratio of 2.1 times) as compared to the other funds in its category.
How BAEF has fared vis-à-vis its peers?
The above table reveals that on the return front, BAEF's performance vis-à-vis its peers is disappointing. Over a 3-Yr time frame, the fund has delivered a return of mere 15.8% CAGR being the second lowest in the peer set above and has not even been able to match the performance of its benchmark.
On the volatility front, BAEF has exposed to its investors to the moderate risk (Standard Deviation of 8.29%) and risk adjusted returns clocked by the fund are appalling (as revealed by the Sharpe Ratio of just 0.13 which is lower as compared to its benchmark) .
Fund Manager Profile
Name of the Fund Manager | Mr. Gaurav Kapur |
| Total Work Experience | Over 9 years |
| Managing the fund since | Mar-11 |
| Qualifications | CFA, CA, MBA |
Bharti AXA Equity Fund was launched during the bear phase of the market in spite of which the fund has failed to capitalise on the opportunity and has fared dismally. The average AUM of the scheme for past 12 months has been ` 80.3 crore and the expense ratio is 2.50%. The fund manager has churned the portfolio very aggressively and has mainly focused on short term opportunities thereby missing the initial advantage of buying stocks at cheaper valuation during its early days.
Investing in a mutual fund during a market downtrend will not automatically translate into generating stellar returns. The strategy of taking momentum calls may hurt long term investors. BAEF is an example of how one may miss to capitalise on opportunities despite being investing at attractive valuation. Investing in a fund managed by a fund house which follows systems and processes and has an established track record of performance may enhance your chances of benefiting from your mutual fund investment.
--------------------------------------------
Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs
Download Mutual Fund Application Forms
Best Performing Mutual Funds
- Largecap Funds:
- DSP BlackRock Top 100 Fund
- ICICI Prudential Focused Blue Chip Fund
- Birla Sun Life Front Line Equity Fund
- Large and Midcap Funds
- ICICI Prudential Dynamic Plan
- HDFC Top 200 Fund
- UTI Dividend Yield Fund
- Mid and SmallCap Funds
- Reliance Equity Opportunities Fund
- DSP BlackRock Small & Midcap Fund
- Sundaram Select Midcap
- IDFC Premier Equity Fund
- Small and MicroCap Funds
- DSP BlackRock MicroCap Fund
- Sector Funds
- Reliance Banking Fund
- Reliance Banking Fund
- Gold Mutual Funds
- Relaince Gold Savings Fund
- ICICI Prudential Regular Gold Savings Fund
- HDFC Gold Fund
Posts
No comments:
Post a Comment