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JPMorgan India Equity Fund (JIEF) is one such open-ended fund from the stable of JPMorgan Mutual Fund, which follows a blend style of investing. Being launched in June 2007 the fund has completed 4 ½ years now.
The fund's primary investment objective is "to generate income and long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities including equity derivatives. However, there can be no assurance that the investment objective of the Scheme will be realised."
JIEF follows a mandate of investing 65% - 100% of its assets in equity and equity related instruments without any market cap bias. Also having a defensive consideration and to manage its liquidity requirements, the scheme may also invest upto 35% of its assets in debt and money market instruments.
Over the past one year, JIEF has held a dominant exposure towards the large caps ranging from 73% - 91%. But ascertaining the volatility experienced by the Indian equity markets in the last one year due to global and domestic economic worries, the fund has preferred to take a defensive stance and has thus taken a moderate exposure towards to the mid & small cap space ranging from 5% - 21%. Similarly, the fund has also preferred to stay invested at all times as revealed by its minimal exposure to debt and cash which has ranged from 3%-6% in past one year.
Equity Portfolio
| Holdings | July 2011 | August 2011 | September 2011 | October 2011 | November 2011 |
| ITC Ltd. | 6.3 | 6.8 | 6.8 | 7.0 | 6.9 |
| Infosys Ltd. | 4.7 | 3.0 | 5.8 | 6.2 | 6.4 |
| Reliance Industries Ltd. | 4.7 | 5.0 | 4.7 | 7.3 | 5.2 |
| HDFC Bank Ltd. | 5.2 | 5.4 | 6.0 | 5.0 | 5.0 |
| HDFC Ltd. | 5.3 | 5.8 | 5.9 | 4.0 | 4.3 |
| ICICI Bank Ltd. | 6.3 | 4.5 | 4.8 | 5.2 | 3.9 |
| Bharti Airtel Ltd. | 5.1 | 4.9 | 4.9 | 3.9 | 3.8 |
| Tata Consultancy Services Ltd. | 3.7 | - | 2.8 | 3.0 | 3.5 |
| Sun Pharmaceutical Inds. Ltd. | 2.7 | 3.1 | 2.9 | 2.5 | 3.2 |
| Hindustan Unilever Ltd. | - | - | 1.7 | - | 3.1 |
As far as portfolio strategy is concerned, JIEF follows the bottom up approach and evaluates companies based on following:
· Strong growth potential
· Whether the company has a special product which has a particular market niche and therefore good earnings potential
· Companies undertaking corporate restructuring.
JIEF's top-10 equity portfolio constitutes of 'A' group stocks only. As per the latest portfolio disclosed as on November 31, 2011, 79.1% of its assets have been allocated to large caps, 15.2% towards mid & small caps, while cash and debt component constitutes 5.7%. Top 10 stocks account for 45.2% of the portfolio which makes it a fairly concentrated portfolio at top. It is noteworthy that 35.1% of its assets are invested in unidentified stocks classified under "other equities". JIEF is benchmarked against BSE 200, and has been reasonably consistent with its stock holdings since its portfolio turnover ratio is moderate at 0.98 times.
How JIEF has fared vis-à-vis its peers
| Scheme Name | 6-Mth (%) | 1-Yr (%) | 3-Yr (%) | 5-Yr (%) | Std. Dev. (%) | Sharpe Ratio |
| Fidelity India Growth (G) | -9.1 | -17.8 | 24.4 | - | 6.76 | 0.25 |
| HDFC Premier Multi-Cap (G) | -17.0 | -20.8 | 22.7 | 6.1 | 7.88 | 0.23 |
| Reliance Reg Savings-Equity (G) | -16.9 | -27.9 | 19.9 | 9.4 | 8.67 | 0.19 |
| JPMorgan India Equity (G) | -10.2 | -19.5 | 18.7 | - | 6.94 | 0.19 |
| Sundaram Equity Multiplier (G) | -16.4 | -21.9 | 12.8 | - | 7.72 | 0.13 |
| SBI Magnum Multicap (G) | -15.4 | -27.3 | 11.6 | -2.1 | 7.56 | 0.11 |
| BSE-200 | -13.1 | -23.6 | 17.0 | 3.3 | 8.25 | 0.16 |
The table above reveals that so far the performance of JIEF has been quite luring. Over a 3-Yr time frame, the fund has clocked a return of 18.7% CAGR, thereby outperforming its benchmark.
Also when assessed on the volatility front, JIEF has exposed its investor to much lower risk (as revealed by its Standard Deviation of 6.94%), and has been able to clock satisfying risk-adjusted returns (as revealed by the Sharp Ratio of 0.19) as well, thus making it a Low risk-Average return investment proposition in the category.
Fund Manager Profile
| Name of the Fund Manager | Mr. Harshad Patwardhan | Mr. Amit Gadgil |
| Total Work Experience | Over 16 years | Over 8 years |
| Managing the fund since | Jun-07 | Jun-07 |
| Qualifications | B.Tech, MBA, CFA | CA, MBA |
As seen above JPMorgan India Equity Fund has been able generate luring returns by exposing its investors to low risk, thus resulting in it achieving a satisfying risk-adjusted return as well. Hence we believe those investors who already have exposure to this fund can continue to hold the same. But if one wants to invest fresh money in multi cap space then one would be better off investing in a fund which has performed well across market cycles and reflects consistency in its returns. A thorough analysis of mutual funds may help you shortlist the potential performers.
Happy Investing!!
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