L&T Equity Fund
The scheme follows bottom-up stock picking, without any bias for sectors. The fund has been benchmarked against BSE 200 but the exposure to the small- and mid-cap share is higher than the average in its category. The scheme has a large-cap bias, with a 20-25% allocation to mid-caps. ?An experienced fund manager plying a workable process with adequate focus on risk management has produced pleasing results for this fund,? said Niranjan Risbood, director, fund research, Morningstar India. ?The investment process, which aims to find companies through bottom-up stock picking that are efficient allocators of capital, is sound. However, the fund is prone to large underweight or overweight positions at sector level given the benchmark agnostic style of investing.? The fund has higher exposure to the financial sector (26%) and technology (12.2%). It is underweight on sectors like FMCG (4.35%), metals (1.95%) and consumer durables (1.83%). Its top stock picks include ICICI Bank, HDFC Bank and Infosys. ?It’s an above-average fund. Although the fund has been able to outperform benchmark in the past years, alpha generated by the scheme is not really impressive. A beta of 0.96 indicates higher volatility in the fund,? said Pankaj Mathpal, a certified financial planner. Risbood says while the scheme has done well since November 2012, the month L&T AMC took over the MF business of Fidelity, the challenge for the existing fund management team would be to build a long-term track record for the scheme.
UTI Opportunities Fund
The fund?s large-cap exposure has risen to about 80% of the portfolio from 60-70% in 2010-11. The focus of the scheme is to capitalise on opportunities in the market by investing in stocks that could surprise on earnings and those that have proven earnings growth better than their sectors. ?The scheme is a consistent performer and has done well not only on the basis of returns but also on risk-adjusted returns. Low volatility and high returns are the USP,? said Pankaj Mathpal, a financial planner. He said the fund has been able to generate an alpha of 3.25, indicating it has performed with quality stock selection and not at the cost of high risk. According to financial planner Nisreen Mamaji, fund manager Anoop Bhaskar uses relative valuations while picking stocks, yet he is not valuation-conscious in the strict sense. In fact, she says, the portfolio?s price multiples have tended to be higher than the category norm over his watch. ?The marked preference for benchmark heavyweights notwithstanding, Bhaskar is no closet indexer. Essentially, it is Bhaskar?s ability to strike a balance between following his conviction and being mindful of the index that keeps the fund ticking,? she said. The fund is heavyweight on financials (24.7%) and technology (15.6%). The fund?s top holdings include ICICI Bank Infosys, HDFC Bank and TCS.