Daiwa Industry Leaders Fund: For moderate risk takers

Daiwa Industry Leaders Fund is an open ended equity fund with an investment objective to generate income and long-term capital appreciation by investing in a diversified portfolio of predominantly equity and equity-related securities of companies identified as industry leaders. Since its inception this fund has delivered consistent performance and is suitable for investors with moderate risk profile, reckons Arnav Pandya.

• This is a large cap focused fund and the fund had the highest exposure to Banks at the end of November 2010. Software, Industrial capital goods and Pharma were some of the other sectors with a high exposure. The fund had a high portfolio ratio of 2.09 and the top holdings were Reliance Industries, ICICI Bank, Infosys, L&T, TCS and SBI. The BSE 100 was the benchmark index for the fund and it was outperforming the benchmark for the one year time period.
• Six months later, Banks remained at the top of the sector list with a 16 per cent share followed by Software, Consumer non-durables and Finance. The portfolio turnover ratio was down to 1.5 times and around 6 per cent of it was in cash and cash equivalents. ICICI Bank was the top individual holding and along with Reliance Industries just had over 5 per cent of the portfolio. Other top holdings were Infosys, ITC, L&T, HDFC Bank and HDFC. The fund remained an outperformer over the one year time period.
• At the end of November 2011, Banks remained the top sector with its holdings comprising over 15 per cent of the portfolio. Software, Consumer non-durables, Auto and Pharma were the other main sectors.  Infosys was now the top individual stock with a 6 per cent share followed by ITC, Reliance Industries, HDFC Bank, HDFC, TCS and ICICI Bank.  The fund had a portfolio turnover ratio of around 1.5 times and it remained an outperformer over the one and two year time periods.
• Six months later Banks were still the top sector in the fund but not far behind were Consumer non-durables and Software both with around 12 per cent of the portfolio. Pharma and finance were two other sectors with a significant exposure. The top five holdings in the fund were between 5-6 per cent of the portfolio with ITC at the top followed by ICICI Bank, Infosys, HDFC Bank and SBI.  The fund remained an outperformer over the one and two year time periods.
• There was a higher share of banks in the portfolio at the end of November 2012 as this had climbed to nearly 20 per cent of the portfolio. Finance, Software and Consumer non durables were other sectors that had a similar kind of exposure of around 10 per cent each. The portfolio turnover ratio remained steady at around 1.7 times but the top individual holding ICICI Bank crossed the 7 per cent mark. Other top holdings consisted of ITC, HDFC Bank, Infosys, HDFC,TCS,  Tata Motors and L&T. The fund was an outperformer over the one and three year time periods ended September 2012.
• This fund is suitable for investors who are able to take moderate risks and who want a predominant exposure to large cap stocks with consistency in performance.