IDFC Premier Equity Fund: Always ahead of the benchmark

The IDFC Premier Equity Fund, which is an open-ended equity-oriented fund, focuses on the small and mid-cap space. With a comfortable portfolio distribution between equity and cash (equity was at 76% at the end of November 2011), the fund has been a consistent outperformer, says Arnav Pandya. In fact, the fund has outperformed the benchmark BSE 500 across every time period. Check out his analysis of the fund-

IDFC Premier Equity Fund

Nature: Equity-oriented open-ended

Inception: September 2005

Assets under Management: 2,388 crore at the end of September 2011

Fund Manager: Kenneth Andrade

ANALYSIS

·         This is a fund that focuses on small and mid cap stocks. At the end of November 2009 the fund had the highest exposure to consumer non durables with a total of 29% of the portfolio in this area. However there are companies from several different sub sectors that have been classified together under this head so this does not represent a select or restricted kind of exposure. Transportation had 10% of the total portfolio and this was followed by finance.  There was also 12% of the portfolio in cash and cash equivalents. Shriram Transport Finance had the highest individual exposure followed by IRB Infra, Shree Renuka Sugars and Pantaloon Retail. The fund was outperforming its benchmark, the BSE 500, over all time periods.

·         The fund maintained the top three sectors in the same position and the position was the same at the end of May 2010.  The exposure to consumer non durables had actually gone up to one third of the portfolio.  Shriram Transport Finance was still the top holding and this was followed by Coromandel International.  Asian Paints, IRB Infrastructure and Glaxo Smithkline Consumer Healthcare were some of the other companies with a high exposure in the portfolio. The fund continued to maintain a high outperformance over its benchmark index.

·         Consumer non durables and transportation remained the top two sectors for the fund at the end of November 2010. The only change was that power managed to edge out finance from the third spot. In terms of the individual holdings Asian Paints edged out Shriram Transport Finance from the top spot and Sun TV was in the top five holdings. The investments were working very well for the fund as its outperformance continued unabated.

·         There were some significant changes in the portfolio of the fund six months down the line as and while consumer non durables remained the top sector in terms of exposure the second spot was now occupied by textile products. This was followed by gas, transportation and finance. Coromandel International was the top holding of the fund with less than 5% of the total exposure followed by Asian Paints, Glaxo Smithkline Consumer Healthcare, Shriram Transport Finance and Bata India.  The fund had nearly one fourth of its portfolio in assets other than equities and it continued its outperformance over all time periods.

·         At the end of November 2011 the fund maintained the highest exposure to consumer non durables followed by textile products. Fertilisers and banks were the other sectors with a significant exposure. Page Industries had the highest exposure with a figure of over 5% of the portfolio followed by Asian Paints. Still the total equity exposure stood at around 76% and the fund had a high turnover ratio of 3.65 times but it delivered results for its unit holders.

·         The fund is meant for investors who want an exposure to the mid cap space with an active management of the portfolio. The consistency of the fund makes it a choice for the core holding of the portfolio of the investor.

Disclaimer: Views expressed in this article are entirely personal.
arnavpandya@hotmail.com.

For full details of the fund including NAV performance, portfolio, and peer comparison click here.