Sharekhan's fund analysis: IDFC Sterling Equity Fund

Sharekhan in its latest report presents its analysis on IDFC Sterling Equity Fund, an open ended equity fund.

IDFC Sterling Equity Fund is benchmarked to the CNX Midcap Index and within that there is an active stock selection. The portfolio bias is towards companies that are financially sound, have a proven business model, tend to lead the markets and are consolidating.

Scheme analysis

With about five years of experience, the fund has been a consistent outperformer in comparison with both the benchmark index, CNX Midcap , and the category average. Despite the volatility and uncertainties in the market, the fund performed much better than its peers, giving returns of 14% over one year as against that of -1.9 % and 8.6% given by the benchmark index and the category average, respectively, in the same period. Over the longer time horizon of three years, the fund has grown at 8.5% compounded annual growth rate (CAGR) while the BSE Mid Cap Index and the category average have grown at -2.3% and 4.7% respectively. In the recent months, the fund has garnered returns of 5.4%, higher than the 5.2% return posted by the benchmark index and 5.1% returns from the mid-cap funds category average. The fund currently has about 44 stocks in its portfolio. It has nearly 90.8% of its net assets exposed to equity while the rest is exposed to other money-market instruments. The top ten stocks form about 40.3% of the portfolio. The fund has invested nearly 15.6% of its funds in the banking sector followed by the pharmaceutical sector, and exchanges and rating agencies with 13.3% and 11.5% allocations respectively.

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