JP Morgan India Equity Fund: For high risk takers

JP Morgan India Equity Fund is an open ended Diversified Equity fund with the highest exposure given to the Financial sector. Financial advisor Arnav Pandya, recommends this fund to long term investors seeking exposure in Finance sector with high risk appetite.

• The fund had the highest exposure to financials at nearly 23 per cent of the portfolio which is a significant figure at the end of February 2010. This was followed by Industrials/Infra at 17 per cent and Technology with 14 per cent. The fund was not averse to taking a higher amount of risk in terms of individual holdings and this was clear from the fact that the top holding in the fund was Infosys at 9 per cent of the portfolio. The other top holdings consisted of Reliance industries, HDFC Bank, TCS and ICICI Bank. The fund was underperforming its benchmark the BSE 200 over the one year time period.
• Six months later there was no change in the list of the top three sectors in the portfolio of the fund but the exposure to the sectors had changed. Financials remained on top but the total exposure had climbed to nearly 30 per cent. In terms of the individual holdings while Infosys was the top holding this was followed by HDFC bank, Reliance Industries, ITC and ICICI bank. The turnover ratio of the fund dropped below 0.7 times and the fund was now outperforming the benchmark over the one year time period but not the three year period.
• At the end of February 2011 there were some changes in terms of the sectors that constituted the top exposure in the fund. Financials remained at the top spot but their exposure was now down to 22 per cent. This was followed by technology and then oil and gas.  The fund now had 53 stocks in the portfolio which was higher than the figure a year ago. At the same time Infosys and Reliance Industries the top 2 stocks in the portfolio had an exposure of around 8 per cent each. Other top holdings included ITC, HDFC Bank and ICICI bank.  The fund was now outperforming over the one and the three year time period. 
• Six months later there was some more churn in the top holdings. While financials continued to hold on to the top spot this was followed by consumer and then by oil and gas.  The fund now had ITC as the top holding with a 6 per cent exposure followed by HDFC, HDFC Bank, Reliance Industries and Bharti Airtel. The portfolio turnover ratio had shot up to more than 1 times and the market cap exposure was mainly ultra large and large cap stocks. The fund now had 50 stocks in its portfolio.
• By the end of February 2012 the situation had once again swung with financials increasing its share and it was now making up one third of the total portfolio. This increased the risk element in the fund since it was dependent on one sector to such a large extent. Oil and gas, technology and consumer were the other sectors with a significant exposure. Reliance Industries was the top holding followed by HDFC Bank, Infosys, ICICI bank and ITC.  The portfolio turnover ratio had shot up to 1.8 times and the fund was outperforming the benchmark over the one year period and was running neck to neck for the three year period.
• This fund is meant for investors who want to take a very high amount of risk while investing in large cap stocks. It is also meant for those investors who want to have a higher exposure to the financial space in the expectation that this will perform well in the near future.