BSL MNC – Fund for all seasons
The moment you hear about a focused theme funds; you fear it to be subjected to excessive price fluctuation, an investment suitable only for certain economic cycles and targeted to investors with high risk appetite. While, yes these traits indeed are true to the category, but BSL MNC Fund – an offering from the BSL fund house is an exception to these traits and scores gold in all areas – a Fund for all seasons.
Where does the fund invest?
As the name suggests, portfolio of the MNC fund is loaded with pure quality MNC companies. Stocks of the companies whose products & services are used very widely and brands which are household names form part of the portfolio. The biggest advantage of MNCs is their transparency in terms of management, cash flow, balance sheet and an absence of corporate governance issues.. in short "Strong Trusted brands".
Key Highlights
- Avoids sectors like Real Estate, Infra and PSUs which have a damaged reputation & investor confidence.
- Higher exposure to consumption driven themes like FMCG, Pharma, consumer durable, hotels etc.
- Some of popular names that you will instantly associate with are Maruti, Gillette, Bata shoes, Colgate, Unilever etc.
Maximizing upside in Bull Markets, Minimizing Downside in Bear markets… Fund for all seasons!!.
As investors we make a mistake chasing funds which have given superlative returns in bull market, however many leaders of bull market are many a times laggards of bear markets and thus over a complete market cycle tend to deteriorate investor wealth. Superlative performance can be delivered by many in a bull market, but minimizing the loss is a rare skill and is of utmost importance. BSL MNC fund has displayed this trait. A fund that has maximized your returns in rising markets and minimized your losses in falling markets.
The table below showcases the consistency of BSL MNC fund across market cycles. In all of the below shown market cycles BSL MNC fund has managed to keep itself away from being a laggard, whereas benchmark indices and thematic indices have atleast once been a laggard.
| Fund/ Index | Bull Phase | Sub-Prime Crises | Post Sub-Prime Crisis | Market Consolidation | Positive sentiment driven rally |
| Apr-03 to Mar-08 | Apr-08 to Mar-09 | Apr-09 to Mar-11 | Apr-11 to Mar-14 | Apr-14 to Mar-15 | |
| BSL MNC Fund | 35.1 | -27.8 | 54.0 | 14.6 | 87.6 |
| CNX Nifty | 37.1 | -36.2 | 39.0 | 4.7 | 26.5 |
| CNX Midcap | 47.5 | -45.4 | 53.6 | 2.3 | 51.0 |
| S&P BSE BANKEX | 41.3 | -41.8 | 72.1 | 3.1 | 43.2 |
| S&P BSE IT | 22.0 | -35.6 | 69.3 | 10.3 | 29.8 |
Source: Morningstar Direct
Low Risk, High Return – Now does that not defy the core investment theory?
As we are taught by academicians; if you want high returns, you need to take extra risk. However past records of BSL MNC fund, that to over a sizeable history, has defied this theory. Over a 5 year and 10 year period, BSL MNC Fund rewards its investors with superlative returns (CAGR returns), at the same time, the fund has been subjected to least amount of volatility (measured by standard deviation).
| Fund/ Index | Standard Deviation (5 Year) | CAGR (%) (5 Year) | Standard Deviation (10 Year) | CAGR (%) (10 Year) |
| BSL MNC Fund | 16.94 | 25.98 | 21.13 | 23.01 |
| CNX Nifty | 17.25 | 10.64 | 24.76 | 14.98 |
| CNX Midcap | 20.61 | 11.19 | 29.25 | 15.73 |
| S&P BSE BANKEX | 28.32 | 15.08 | 35.45 | 18.92 |
| S&P BSE IT | 23.00 | 16.09 | 26.27 | 14.79 |
Returns as on May 2015, Source: Morningstar Direct
A fund which has never given negative returns over a 5 year period.. That too with minimum return equivalent to any fixed return investment
| Key performance highlights | BSL MNC Fund | CNX Midcap | CNX MNC | CNX Nifty Index |
| Return on an average made if you would have made investment on any random day during tenure of the fund | 22.00% | 21.30% | 14.90% | 16.30% |
| % times investment has fetched positive return | 100.00% | 98.40% | 98.70% | 98.10% |
| Maximum Return | 40.56% | 57.49% | 31.68% | 44.49% |
| Minimum Return | 7.41% | -2.08% | -3.63% | -1.16% |
| % times investment has fetched more than 10% CAGR returns | 95.40% | 75.40% | 70.10% | 67.60% |
| % times investment has fetched more than 20% CAGR returns | 55.80% | 45.30% | 28.40% | 33.60% |
Returns as on May 2015, Source: MFI
BSL MNC Fund Report card – An All-rounder
| Parameter | BSL MNC Fund | Thematic/ Sector Fund | Large Cap fund | Small-Midcap Fund |
| Diversified Portfolio | ✓ | ✖ | ✓ | ✓ |
| Ability to Limit losses in Bear market | ✓ | ✖ | ✓ | ✖ |
| Maximizing wealth in bull market | ✓ | ✓ | ✖ | ✓ |
| Minimal price fluctuation | ✓ | ✖ | ✓ | ✖ |
| Fit for all economic cycles | ✓ | ✖ | ✓ | ✓ |
Note: The above report card is a relative comparison. A cross against a particular category does not mean that fund in respective category does not provide the feature on standalone basis.
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