Religare PSU equity fund: An ideal fund for risk takers
Published on Sat, Feb 04, 2012 at 11:53 | Source : Moneycontrol.com
Updated at Sat, Feb 04, 2012 at 16:02
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Religare PSU equity fund: An ideal fund for risk takers
Have a risk taking appetite? Religare PSU equity fund is the fund for you, reckons Arnav Pandya. It is suitable for those investors who can take a higher amount of risk while taking a three year time horizon or more on their investments.
Have a risk taking appetite? Religare PSU equity fund is the fund for you, reckons Arnav Pandya The fund has been a consistent performer since its inception, and is suitable for those investors with high risk taking capacity with the investment horizon of three years or more.
This fund invests in public sector companies present in the country across different sectors. At the end of August 2010, the highest exposure of the fund was to banks with nearly 27 per cent of the portfolio in this area. This was followed by oil, power and gas as the other sectors with a significant exposure. In terms of the individual holdings the fund was maintaining an aggressive position as the top holding of the fund was ONGC with around 10 per cent of the portfolio here. OIL, NTPC, IOC and BHEL were some of the other top holdings of the fund. The fund had around 28 stocks in its portfolio. The fund was an outperformer as compared to its benchmark index the BSE PSU index for all periods since inception.
By the end of December 2010 banks remained as the top exposure of the fund with around a quarter of the portfolio still here. Power however jumped to the second spot with a 17 per cent exposure followed by oil. The portfolio turnover ratio of the fund was nearly 1.5 times and this was visible in the change in the holdings in the fund. The top holding at this stage was NTPC followed by ONGC, BHEL, SBI and SAIL. The fund remained a strong outperformer over the one year period and also since its inception.
Six months later while banks still remained at the top of the sector holdings the gap with the second placed power sector was just 3 per cent. Oil, minerals and mining and industrial capital goods were the other sectors where the holdings were more than 10 per cent. The portfolio turnover ratio dipped slightly. In terms of the individual holdings, ONGC was once again at the top followed by NTPC, BHEL, Power grid and Coal India. It is significant that the highest exposure to a bank was at the eight spot to Bank of Baroda. It was still outperforming the benchmark for the one year period and since inception but the one year return had turned negative in absolute terms.
The fund maintained a steady position in terms of its strategy and holdings over the next six months and this was reflected in the portfolio turnover ratio that dropped significantly to 0.6 times. Banks were still the top sector holdings followed by power, oil, minerals/mining and gas. The top individual holding was ONGC followed by NTPC, Coal India, Power Grid and GMDC. The fund continued its outperformance over the last two years and since inception but the returns sunk more into the red in absolute terms as the markets headed downwards.
This fund is meant for investors who want a specific exposure to public sector stock as a means of diversification in their portfolio. It is suitable for those who can take a higher amount of risk while taking a three year time horizon or more on their investments.
For full details of the fund including NAV performance, portfolio, and peer comparison click here.
Disclaimer: Views expressed in this article are entirely personal.
