Quantum LT Equity: Good performer, apt for naive investors

Quantum Long-Term Equity Fund is an open-ended scheme that seeks to achieve long-term capital appreciation by investing primarily in shares of large and mid-cap companies that will typically be included in the BSE 200 Index and are in a position to benefit from the anticipated growth and development of the Indian economy and its markets. Looking at the fund’s performance this scheme has remained true to its stated objective and can form an integral part of investor’s portfolio, reckons Arnav Pandya.

• The fund had the highest exposure to Banks and Software with nearly 13 per cent of the portfolio in each of these sectors at the end of December 2010. Finance, Cement and Transportation were some of the other areas with a slightly higher exposure. What was significant was that nearly 19 per cent of the portfolio was in liquid assets. HDFC and TCS were two stocks with a 6 per cent plus exposure in the portfolio. Some of the other stocks with a high holding included HUL, HDFC Bank, Bajaj Auto, Infosys and Zee Entertainment. The fund was an outperformer over the benchmark BSE 30 Total Return Index over the one and three year time periods.
• Six months later the portfolio turnover ratio had come down from 45 per cent to around 34 per cent.  The liquid part of the portfolio too had come down to 11 per cent. Banks continued to be the top sector with a 14 per cent share followed by software, auto, consumer non durables and finance.  There were several stocks with a 5 per cent plus exposure and this included Bajaj Auto, HDFC Bank, HDFC, TCS and Infosys.  The fund was an outperformer over the one, three and five year time periods.
• There was an element of stability in the portfolio of the fund as at the end of December 2011 banks continued to be the top individual sector followed by software, auto, finance and cement. The fund had reduced the liquid exposure further to around 6 per cent of the portfolio. Bajaj Auto with a 6 per cent share was ahead of HDFC in terms of individual stock holdings.  TCS, Infosys, HDFC bank, Zee Entertainment and Container Corporation were some of the other top holdings.  The fund was an outperformer over the one and three year time periods.
• Six months later banks continued to be the top sector in the portfolio with nearly 15 per cent share.  Software, auto, finance and power were some of the other top sectors.  Bajaj Auto, TCS and HDFC were three stocks in the portfolio with a share of 6 per cent or more. Other stocks with a high exposure were HDFC, Zee Entertainment, Infosys and Container Corporation.  The fund had a beta of just 0.65 and was a comfortable outperformer over the one and three year time periods.
• At the end of December 2012 the fund had the highest exposure to banks in its portfolio followed by auto, software, finance and media and entertainment. Around 10 per cent of the portfolio was in liquid assets. Bajaj Auto continued to be the top holding with a share of more than 7 per cent. HDFC, HDFC Bank, Zee Entertainment, TCS, Infosys, Container Corporation and Maruti Suzuki were some of the other top holdings.  The portfolio turnover ratio was a mere 14 per cent and the fund was an outperformer over the one and three year time periods.
• This is a fund that can form a part of the core segment of an investors portfolio. It is suitable for all those investors including first time investors who want to have a well diversified fund that follows a buy and hold strategy.