Even though it has a wide exposure in different asset classes, the Edelweiss Diversified Growth Equity Top 100 Fund is an investment option for investors with a high risk appetite, says expert Arnav Pandya.
Even though it has a wide exposure in different asset classes, the Edelweiss Diversified Growth Equity Top 100 Fund is an investment option for investors with a high risk appetite, says expert Arnav Pandya. Since its launch, the fund has had high exposure in futures and liquid assets, but in August 2011 the consumer durables sector held the greatest weightage. Even though it is a risky investment, the fund has consistently outperformed its benchmark in the longer time periods.
Nature: Equity Oriented Open Ended
Inception: May 2009
Assets under Management: Rs 52 crore at the end of August 2011
Fund Manager: Paul Parampreet and Nandik Mallik
• After its launch the fund had the highest concentration of its portfolio in Nifty Index Futures at the end of July 2009 at nearly 20% of the total assets at this point of time. Banks, petroleum products and power were the other areas with more than 10% exposure. In terms of the individual stocks Torrent Power was the top holdings followed by Axis Bank, Canara bank and PNB and then Cairn Energy. Another 19% of the portfolio was in debt and liquid instruments so there was a slightly different kind of exposure in the portfolio that was witnessed at this point of time.
• At the end of December 2009 the Index future exposure had dropped to 13% of the portfolio while the cash and liquid equivalents were just 3%. Banks continued to be the top sector holding in the portfolio followed by software and petroleum products. The overall top holdings had also changes with SBI being in the top spot followed by Oracle, Mphasis, Hindustan Zinc and Tata Motors. The portfolio continued to have a mixture of both large and mid cap holdings and the total number of holdings had risen in number from the situation several months ago.
• The fund continued to maintain its futures and liquid assets exposure together at nearly one fifth of the overall portfolio at the end of June 2010. There was another churn in the portfolio with banks followed by pharmaceuticals and consumer non durables being the top sectors. In terms of the individual holdings the top holdings tilted towards large caps with Reliance Industries, ICICI Bank, HDFC bank, SBI and Infosys comprising the list. The fund was a slight underperformer as compared to its benchmark the CNX Nifty over the one year period. The active management of the fund was evident as the portfolio turnover ratio was a massive 4.07 times. A month later this ratio was nearly 9 times which is very high.
• By the end of December 2010 the Nifty future exposure had dropped to just around 7% with banks remaining as the top sector holding. This was followed by software, consumer non durables and pharma. In terms of the top individual holdings there were some small changes that were witnessed from the situation a few months back. The fund was an outperformer since its inception but trailed slightly on the one year parameter.
• On 30 April 2011 the banks were still the top holding followed by consumer non durables and software. The Nifty futures exposure and cash and other liquid assets had climbed to around 22% of the portfolio. There were some new names among the top holdings like M&M, HDFC and TCS but now HDFC bank was the top holding. The fund was still an underperformer over the one year period while the turnover remained at over 4 times.
• The end of August 2011 saw the consumer non durables sector being the top holding with nearly one fourth of the total portfolio in this area. This was followed by banks and finance. HDFC was the top holding individuals but ITC and Dabur also made their way into the list of stocks with high exposure.
• Investors willing to take a higher amount of risk while investing in a portfolio having exposure to equities, derivatives and some debt are the only ones who can consider this fund for their investment requirements.
Disclaimer: Views expressed in this article are entirely personal.
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