IDFC Sterling Equity: Good performer; holds strong outlook

IDFC Sterling Equity Fund is an open ended fund primarily investing in Small & Mid cap space. The fund has got highest exposure to Banking & Finance sector followed by Pharmaceuticals, and Engineering. Performance wise, this fund has comfortably outperformed its benchmark index over varied time frame. This fund is meant for investors with little aggressive approach, reckons Arnav Pandya.

• The fund focuses on medium sized companies with proven business models that will end up becoming leaders over a period of time. At the end of October 2011, the fund had the highest exposure in the portfolio to consumer non durables at 11 per cent. Finance, telecom and auto were three other important sectors present in the portfolio. M&M financial services was the top individual holding with Nestle, VST Industries, Hexaware, Eros International being some other stocks with a significant share in the portfolio. The portfolio turnover ratio was high at 1.85 times. The benchmark for the fund was the CNX Midcap Index and it was an outperformer over the one and three year time periods ending September 2011.
• The situation had not changed much on the sector portfolio holdings at the end of April 2012. Consumer non durables was the top individual sector though its share had gone up to 14 per cent. Finance, software, Pharma and auto were some of the other areas that had a significant share in the portfolio. There was however a change in the list of top individual holdings with VST Industries occupying this spot. Nestle India, Hexaware,LIC housing Finance, Apollo Tyres and Strides Arcolab were some of the other top stocks. The fund was an outperformer over the one and three year time periods ended March 2012.
• Seven months later there were some changes witnessed in the list of top holdings as Strides Arcolab had now climbed to the first spot with a share of 5.7 per cent in the portfolio. M&M Financial Services, Nestle India, Bajaj Finance, Wockhardt, Vardhman Textiles, VA Tech Wabag and Castrol India were some of the other top stocks in the portfolio. The fund improved its performance and was now a massive outperformer over the one and three year time periods ended September 2012.
• The churn in the portfolio continued over the next several months. At the end of April 2013 Pharma was the top sector followed by banks, consumer non durables, finance and cotton textiles. The top holding in the portfolio has always been present with a conservative bias and Wockhardt was now in this spot but with a share in the portfolio of less than 5 per cent. VA Tech Wabag, Bajaj Finance, Vardhman Textiles, Strides Arcolab, Nestle India, M&M Financial Services and Idea Cellular were some of the other top holdings. The fund continued its strong outperformance over the one and three year time periods.
• The fund is suitable for investors who are looking towards building a strong portfolio and are looking to adopt a slightly aggressive approach in the process. It is meant for investors who are willing to wait for some time to see the results of their investments and have an outlook for more than 3 years.