Mutual Fund - Prudential ICICI Dynamic Plan-Growth Fund : Analysis

Prudential ICICI Dynamic Plan-Growth

Name: - Prudential ICICI Dynamic Plan -Growth Type: Open-Ended equity fund Fund Manager: Mr. Anil Sarin Inception Date: October 18, 2002 Prudential ICICI Dynamic Plan was launched in October 2002 and seeks to generate capital appreciation by actively investing in equity and equity related securities. However, for defensive considerations, the scheme may invest in debt, money market instruments and derivatives. The distinguishing feature of the scheme is that it has the flexibility to move its assets between equity, debt and liquid as per the market conditions and could invest 0-100% in equity & equity related instruments and 0-100% in debt, money market and cash. But since its inception, the fund managers have been bullish on the equity side and kept a higher allocation towards equity. Its average equity exposure since inception has been around 89.86% and the lowest it has gone is to 75%. As on May 2006 it has invested 89.76% of its assets in equities, 1.2% in debt and rest in cash and equivalent.

Performance as on June 26, 2006   Simple Annualized Compound Annualized Scheme Name 6 Months 1 Year 2 Years 3 Years Since Inception Prudential ICICI Dynamic Plan -G 15.69 61.92 70.35 56.82 53.01 Peer Group Average- Equity Diversified 5.53 40.73 52.78 53.70 21.68 S&P Nifty 8.48 38.78 43.90 41.00

The fund's performance has truly been dynamic. An actively and aggressively managed scheme has outpaced its benchmark and peers by a mile. Its one year return at 61.92% is far superior to the returns posted by benchmark and average diversified equity funds. Judicious mix of stocks across the market capitalisation and well diversified portfolio explains the performance. Its asset base has grown manifold from Rs 313 crore to Rs 1044 crore in last one year.

The scheme has well diversified portfolio spread across 52 stocks and follows growth and blend style with exposure to large caps, midcap and small cap stocks. As on May 2006 top 10 holdings account for 34.50% of the portfolio with Reliance Industries in top place. Other top holdings in its portfolio include Deccan Chronicle Holdings, Jain Irrigation System, State Bank of India and Sterlite Industries. Over a period of one year it hiked exposure to Engineering and Auto sector while pared in IT sector. ITC, Tata Steel, Infosys, Punjab National Bank etc. were some of the stocks that made fresh entry into the portfolio while Reliance Energy, Ranbaxy, Jindal Photo Films and Reliance Natural Resources Ltd. made an exit from the portfolio. However due to frequent churning of the portfolio the turnover ratio has gone up compared to the typical diversified equity funds. Top five sectors in its portfolio are Diversified, Computer, Bank, Engineering and Miscellaneous sector and account for more than 50% of net assets. Few of its stocks EID Parry, Deccan Chronicle, JaiPrakash Associates have appreciated significantly.

Minimum investment required to enter the scheme is Rs 5000 and offers dividend, growth and FII options .It charges an entry load for investments of 2.25% for investment below Rs 5 crore while no exit load is levied. The scheme is benchmarked against S&P Nifty. Expense Ratio of the scheme as on May 31, 06 is 2.03% and is lower than the category average of 2.16%. Prudential ICICI Dynamic Plan has the option to move its assets into cash and debt instruments upto 100% to minimize the downside in bearish market. This looks interesting seeing the current state of the market but at the same time requires the fund manager to take a call not only on the stocks but on the future course of equity and debt markets. The scheme's performance so far has been encouraging. However, it shows high risk profile compared to typical diversified equity funds and is suitable for aggressive investors.

 

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Mutual Fund - Franklin India Flexi Cap Fund - Growth : Analysis

Franklin India Flexi Cap Fund - Growth

Type: Equity Diversified Fund Manager: R Sukumar, K.N Siva Subramanian Launch Date: 09-Feb-2006 Franklin India Flexi Cap Fund was launched in Feb 09, 2006, and has been in operation for more than a year now, and has grown at a CAGR of 47.95%. The investment objective of the scheme is to provide medium to long term capital appreciation by investing in stocks across the entire market capitalisation range. The theme that this scheme follows is to have a flexible investment mandate, allowing the fund manager to shift allocation across large, mid and small cap stocks, considering the prevailing market situation. A look at some of the indices from March 05 reveals that the scheme has outperformed its benchmark index CNX 500 by a handsome margin of 15.66% in the last one-year period, but its out performance compared to CNX Midcap and CNX Nifty Junior is even greater at 29.52% and 32.41% respectively. But the scheme has underperformed BSE Sensex by a marginal 0.11% in the same period. Franklin India Flexi Cap fund currently has a large cap exposure of around 74%, midcap exposure is restricted to around 15% and exposure to small cap scrips is around 4%.The asset allocation in the last one-year has generally been biased toward large cap stocks, and on an average large cap exposure has remained over 75% of the net assets. Franklin India Flexi Cap Fund manages assets worth Rs 2674.28 crores, which has seen a steady increase, since its launch. Lately the fund has seen some erosion of assets as the corpus fell from around Rs 3000 crores in Apr to present levels, but that could be attributed to the market meltdown. The scheme has invested in 49 scrips and top 5 holdings account for 27.82% of the portfolio and top 10 scrips constitute 46.03% of the portfolio, therefore it has a pretty diversified portfolio.

The total equity allocation is 93.74% of the net assets and 6.26% of the net assets are invested in cash and equivalent. Infosys Technologies Ltd, MICO and Grasim Industries Ltd comprise top three stocks in the portfolio. The scheme added fresh positions in stocks like Reliance Industries Ltd, Gujarat Ambuja Cements Ltd, IDFC and Lupin Ltd, whereas, the scheme exited from some of the stocks completely like Bajaj Auto, Castrol India, HLL, Tata Steel and ICICI Bank.

Performance as on August 16, 2006   Absolute Compound Annualized Scheme Name 3 Month 6 Months 1 Year Since Inception Franklin India Flexi Cap Fund - Growth -7.03 8.12 47.25 47.95 Rank 37/156 34/133 11/118 -- CNX 500 -8.08 5.24 31.59 -- Peer Group Average -9.67 3.38 31.73 --

The scheme is still in its early days and is ranked in the eleventh place in the one-year return period amd though it is not performing as well as some of the other equity schemes, but that is chiefly because of the over dependence on large cap stocks since its inception, the scheme has preferred to played it safe. Franklin India Flexicap has a huge asset base and strong parentage, which are some of the factors which will help the scheme perform better if the sentiments improve on the dalal street going forward.

 

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Mutual Fund - Can Balanced II -Growth Fund : Analysis

Can Balanced II -Growth

Name: - Can Balanced II -Growth Type: Open-Ended Balanced Fund Fund Manager: Mr. Umesh Kamath Inception Date: Feb 1, 1993 Balanced Funds are intended for those investors who want the returns of equity and stability of debt securities. One such scheme is Can Balanced II from Canbank Mutual Fund. Erstwhile GIC Balanced Fund the scheme was made open-ended in March 2000. It seeks to generate long-term capital appreciation and or income from a balanced portfolio of equity shares and fixed-income securities.

Performance as on August 01, 2006   Absolute Compound Annualized Scheme Name 6 Months 1 Year 3 Year 5 Year Since Inception Can Balanced II-G 6.74 46.26 40.10 29.42 9.63 Rank 3/24 1/24 2/22 5/21   Peer Group Average 1.6 22.93 31.52 26.07 17.16 Crisil Balanced Fund Index 4.67 22.53 24.17

The scheme has been a consistent performer with long term track record. Judicious asset allocation among equity and debt, select momentum picks and rally in large cap stocks has helped the scheme to top the charts evident from its rankings in last one year. It has pulled off exceptional one year return of 46.26% while category and benchmark posted meager 22.93% and 22.53% respectively during the same period. As a hybrid fund it has capitalized well on the soaring equity markets and volatile debt markets and its one year returns are even better than the returns delivered by average equity diversified funds at 28.02%. However its average allocation in equities at 70.7% in last one year period is on the higher side. Also the cash exposure of the scheme has gone up in last six months. Its assets base at Rs 69.82 crore as on June 2006 has witnessed a growth of 37.6% in past one year.

The scheme could invest upto 65% in equity and equity related instruments or fixed income securities, upto 40% in money market instruments and upto 20% in mutual fund units. As per its latest disclosed portfolio it has invested 53.33% of its assets in equities, 13.46% in debt instruments and rest in cash and equivalent. The scheme's portfolio is spread across 18 stocks. Top 5 holdings account for 34.10% of the equity portfolio. Siemens find top place in the portfolio and account for 10.65% of its equity assets. The fund focuses on growth strategy with major emphasis on large cap stocks Index heavyweights ITC, Reliance, BHEL and Tata Motors form the core part of the equity portfolio. However the fund does not hesitate to include midcap and smallcap stocks in its portfolio. This month it exited from the stock of Dr. Reddy laboratories. The fund seems to be bullish on Auto, Engineering and Diversified sector and has increased exposure in last one year. However it pared exposure in Metal and Electrical Sector and top 5 sectors as of now account for less than half of the equity portfolio. Key holdings in its portfolio such as BHEL, Siemens have appreciated significantly in last one year. The fund has cling to its top holdings in last one year while quickly moved out of others. Debt Portfolio carries low credit risk as 4.11% of its net assets in debt are represented by AAA rated instruments, 8.19% in LAAA followed by 13.14% in Sovereign instruments. The fund has invested 12.31% of its net debt assets in commercial bonds and 13.14% in T-Bills and 8.72% in securitised debt. This month new inclusions in debt segment was 7.4% GOI 2012 .Average maturity of the debt portfolio is 726 days and is higher than the category average of 696 days.

Minimum investment required to enter the scheme is Rs 5000 and offers both dividend and growth options. The scheme charges an entry load of 2% while an exit load of 1% is levied if redeemed within 1 year from the date of purchase. The scheme is benchmarked against Crisil Balanced Fund Index. Expense Ratio of the scheme as on May 31, 06 is 2.5% and is higher than the category average of 2.30%. Can Balanced Fund II 's stupendous performance and long term track record makes it suitable for those investors who have less appetite for risk and seeks to protect their capital through investments in Balanced Funds.

 

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Mutual Funds - Kotak 30-Growth Fund - Analysis

Kotak 30-Growth
Name: - Kotak 30 –Growth Type: Open-Ended equity diversified Fund Manager: Mr. Anand Shah Inception Date: December 29, 1998 Kotak 30 as the name implies seeks to generate capital appreciation from a portfolio predominantly of equity and equity related securities with investment in, generally, not more than 30 stocks. It is a basically a large cap diversified scheme with some flavour of midcap stocks.
	Performance as on July 3 , 2006   Simple Annualized Compound Annualized Scheme Name 6 Months 1 Year 3 Years 5 Year Since Inception Kotak 30-Growth 11.83 58.66 55.29 38.59 30.25 Rank 12/128 8/109 19/67 23/50   Peer Group Average 3.01 40.48 50.76 38.14 21.80 BSE Sensex 12.11 48.00 43.18 26.40   S&P Nifty 9.28 42.18 40.10 24.10
	The scheme figures among top performing funds in the diversified equity fund's space, has been a steady performer and boasts of the best five year returns at 38.59%. Its one year and three year returns have been higher than what peers and benchmark indices notched up over the same period. The actively managed portfolio of largecap stocks and select momentum picks appear to explain this performance. Its corpus at Rs 282 crore as on May 2006 has witnessed a growth of 58.4% over last one year and imparts it enough flexibility for management. The scheme as per stated guidelines could invest 60-100% in equities and 0-40% in Debt and Money market instruments. As on May 2006 it has invested 86.77% of its assets in equities, 5.68% in debt and rest in cash and equivalent. Average equity allocation for the scheme has been at 91.2% past one year and since last two month it has significant allocation to cash in excess of 7%.
	Its equity portfolio as on May end is spread across 27 stocks with Infosys Technologies in top spot. The fund has stick to its investment objective and has never invested in more than 30 stocks in last one year and that's why top 10 holdings account for half of equity portfolio. Besides Infosys Technologies other top holdings are M&M, SAIL, PNB and Sterlite industries. This month it added NALCO, HLL and Patel Engineering in its portfolio while exited Bajaj Auto, Reliance Energy and HDFC. The fund has increased exposure in Computers, Pharma and Diversified sector while substantially reduced in banking sector in last one year. Top 5 sectors account for more than half of equity portfolio and Diversified sector alone accounts for 21% of the portfolio .The fund has cling to some stocks while actively replaced others. The scheme follows a bottom-up approach to stock selection and the investment strategy is to take balanced exposure across sectors while maintaining less than 30% exposure to mid-cap stocks. Not only frontline stocks BHEL, Siemens, L&T but stocks like EID Parry and Deccan Chronicle Holdings has gained substantially in last one year. Its stock calls and rally in large cap stocks has been the driving force behind spectacular performance.
	Minimum investment required to enter the scheme is Rs 5000 and offers both dividend and growth options .It charges an entry load of 2.25% for investments less than Rs 5 crore and nil for investments of Rs 5 crore and above. While no exit load is levied. The scheme is benchmarked against BSE Sensex and S&P Nifty. Expense Ratio of the scheme as on April 30, 06 is 2.5% and is higher than the category average of 2.20%. The fund has a large cap focus and looking at the current state of the market seems an appropriate investment option for conservative investors.

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Mutual Fund - UTI Thematic Large Cap Fund – Growth : Analysis

UTI Thematic Large Cap Fund – Growth

Type: Equity Diversified
Launch Date: 07-Apr-2004
Fund Manager: Swati Kulkarni

The rally in the last year has been chiefly driven by large cap stocks and some select midcap companies. Unlike the previous rally, where the length and breadth of the market participated in the upward movement, only a section of the markets has witnessed significant appreciation. Most of the equity-oriented funds which had a major allocation in the large cap blue-chip companies have in general managed to outperform, but going against the trends, UTI Thematic Large Cap fund has not been able to reap the full advantage of the current rally as much as the investor would have liked to.

The scheme has trailed its benchmark index BSE Sensex by 18 per cent in the last one year, placing the scheme at the bottom of the table. UTI Thematic Large Cap fund has been in existence for more than two and a half years, which is a relatively long period to judge the scheme, considering the fact that the scheme has seen both sides of the markets in the interim period.

The scheme was launched along with five other theme-based funds simultaneously. The other themes being midcap, basic industries, auto, banking and PSU. Though thematic funds provide a more focused approach towards investment, they also rank higher in the risk-return scale. But, contrary to this, investing in a large cap oriented fund involves lesser amount of risk, because the portfolio is diversified across several sectors. The restriction is more on style of investment rather than in the areas of investment. Therefore a thematic fund which concentrates on a particular sector or multi-sectors, like an Infrastructure fund will definitely have a different risk profile compared to UTI Thematic Large cap fund.

UTI large cap Fund has a policy of staying fully invested into equities at all times, apart from brief period in times of market downturn – to restrict the losses, and currently the scheme has more than 95 per cent of the net assets into equities. The scheme has been true to its investment mandate as well, and has not ventured into the midcap and small cap at all to generate excess returns.

The fund has a tiny corpus of Rs 28.07 crores, which is very low, compared to some of its peers, and this has not helped the scheme's performance at all. A large cap oriented portfolio requires a decent corpus size to take meaningful positions on the stocks. The portfolio is presently spread across 27 scrips, which is optimal.

The scheme in the last two quarters has starter greatly mimicking the BSE Sensex basket, as 85.93 per cent of the total portfolio is invested into Sensex scrips. The average exposure prior to that was around 60 per cent. The strategy of shifting the allocation towards the Sensex scrips does not seem to have worked in the scheme's favour as in terms of month-on-month performance; the scheme is lagging the benchmark in the last couple of quarters.

The scheme in the last one year has been bullish on Software sector, which has helped it put up an average show. The fund manager was big on the Banking sector till late last year, but currently the scheme is underweight on the sector. Some of the other sector like Power has also gone completely out of favour which has impacted the returns, whereas exposure to Pharmaceuticals sector has been hiked. Considering the fact that the market is flooded with similar kind of large cap oriented funds, which have been around for quite a while and have a proven track record, investors, who wish to invest in these kind of funds as a core investment strategy would be better off to reallocate their holdings in better performing schemes.

Performance as on February 07, 2007
	Absolute			Compound Annualized
Scheme Name	3 Months	6 Months	1 Years	Since Inception
UTI Thematic Large Cap Fund - Growth	6.1893	24.5351	30.2949	28.5067
Rank	141/164	144/162	27/133	-- --
BSE Sensex	10.5486	33.5838	48.671	-- --
Peer Group Average	10.0388	33.6398	33.103	-- --

 

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Mutual Fund - UTI Opportunities Fund -G : Analysis

UTI Opportunities Fund -G

Type: Open Ended Equity Diversified Fund Manager: Siddharth Dembi Inception Date: 20-Jul-2005 UTI opportunities fund was launched in July last year and has completed one year of operation in Indian markets. The scheme seeks to generate capital appreciation and/or income distribution by investing the fund of the scheme in equity and equity related instruments. The main focus of the scheme is to capitalize on opportunities arising in the market by responding to the dynamically changing Indian economy by moving its investment amongst different sectors as prevailing trends change. As of July 2006 the scheme has Rs 548.77 crores worth of assets under management, and the scheme has deployed 88.82% of its assets in equities and 11.18% in cash and equivalents. The fund manager has been quite aggressive in the past and the equity allocation has gone as high as 99.10% in the month of April06.

Performance as on August 29, 2006   Absolute Compound Annualized Scheme Name 6 Months 1 Year Since Inception UTI Opportunities Fund - Growth -5.4687 25.6846 29.3938 Rank 130/136 91/119 -- Peer Group Average 4.6083 34.5192 -- BSE 100 9.7638 45.3597 --

Although UTI Opportunities fund has been in operations only for a year the performance record so far has not been very encouraging. The scheme has generated negative returns in the last six months period, whereas its benchmark index BSE 100 has appreciated by 9.7% in the same period. In the one-year time frame even the scheme is ranked at 91st place.

The scheme has a diversified portfolio of 27 stocks, which is quite good for a scheme having a fund size of Rs 548.78 crores. Top 10 holdings accounted for 59.13% of its equity portfolio. Auto & Auto Ancilliaries sector receives the highest weightage in this month's portfolio, followed by Diversified and Entertainment sector. Top 3 sectors constitute around 44% its total equity portfolio, which shows the fund manager is not hesitant on taking calls on few sectors which he find attractive in the long term.Top 5 holdings are Reliance Industries Ltd, BHEL, ITC, TVS Motor Company and Bajaj Auto Ltd which account for 33.68% of the net assets. The portfolio is spread across stocks with varying market capitalisation and allocation to large cap stocks is around 55%, which is understandable given the investment mandate of the scheme to invest in upcoming companies.Maruti Udyog Ltd was the only stock which was added to this month's portfolio while the scheme exited from ONGC. Normally investors in these kinds of funds have a longer investment horizon as the theme of investing in new and upcoming businesses generally take 3-5 years to fully reap the advantages of its investments. The scheme seems to apply buy and hold strategy to good use, but the results have not been very encouraging till now. The scheme's returns have taken a severe beating in the recent crash and are still struggling to recover from it. Investors may find other schemes from various fund houses based on the same objectives more attractive at this juncture.

 

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