The time to review our ‘Select Funds’ list has arrived! For those of you new to our platform, FundsIndia’s ‘Select Funds’ is a list of investment worthy funds across various categories that helps you narrow down your investment choices from the hundreds of funds that you would otherwise have to sift through before investing.
This list is reviewed on a quarterly basis. There are additions to ensure that good choices are not left out. There are also deletions if we find certain funds’ strategy not too appropriate for prevailing market conditions.
Before we move on to the changes we have made this quarter, here’s an important message – none of the funds we removed warrant a sell. We do not prefer that you sub-optimally churn your portfolio. Our endeavour, through this list, is to choose funds that are good and appear to have an edge in the present environment.
Hence, unless we state in this article that a fund is risky or best kept away, you can continue to hold any of the schemes we have moved out of the list. The new choices given can be considered for any fresh investment, provided it suits your risk profile (as mentioned for those schemes).
Equity Funds
We do not have much of a change in our ‘Equity Funds – Moderate Risk Category,’ save for adding a fund – SBI Bluechip. This fund was in our radar for a while and its consistency prompted us to get it on-board, given the limited universe of large-cap funds in the list. You can add it if you want a fund that has a large-cap exposure beyond just the bellwether index stocks.
We have made quite a few changes in our ‘Equity Funds – Aggressive Category.’ Here, we would like to reiterate that the funds we chose to move out – SBI Magnum Global as well as Canara Robeco Emerging Bluechip are good performers. SBI Magnum Global continues to be a stable, slightly larger (market cap) mid-cap fund.
Also, we have such funds in the form of IDFC Premier Equity and HDFC Mid-cap Opportunities that have a similar market cap exposure. With markets already re-rating much of these, we needed to move to the next segment of market cap which may yet have re-rating opportunities and hence, the addition of SBI Magnum Mid-cap Fund.
With funds in the smaller market cap segment such as Canara Robeco Emerging Bluechip – the choice of sectors played a role, besides the ability to beat peers convincingly. In this segment, given the risks taken, it is important to generate far superior risk-adjusted returns and Franklin India Smaller Companies scored on this account.
Also, we preferred the direct beneficiaries of a revival, i.e., engineering companies, which received higher weight in Franklin India Smaller Companies. The latter was therefore added. But do note that this fund, as well as the previous one (mentioned above) from Canara Robeco, is strictly for high-risk investors. The fund’s exposure in the overall portfolio should also be limited to about 15-20 per cent.
We added one other fund to our aggressive list – UTI Mid-cap. If IDFC Premier Equity, HDFC Mid-cap Opportunities and Franklin India Prima Fund were on the lower end of this category’s risk profile, and Franklin India Smaller Companies on the higher end, UTI Mid-cap would come in the middle. Its different take on sectors (with the highest exposure to automotives at present) and the success of fund manager, Anoop Bhaskar, prompted us to add the fund, besides its ability to come clean in our risk, consistency and volatility filters.
Debt Funds
Among the Monthly Income Plan (MIP) funds, we have added HDFC Multiple Yield Fund Plan 2005 as we had to reward its consistency and ability to maintain equity exposure at steady levels. Canara Robeco MIP, although did well in terms of beating the benchmark, is less of a bull market fund given its conservative approach.
Lower exposure to gilt could mean that it may not gain as much as some of the other MIPs that are loaded with gilt and have higher average maturity. While we still like the fund for its stability, we think these are times when some tactical calls can fetch higher returns. We maintain a hold on the fund.
In the ‘Debt Funds – 6 Months to 1 Year’ category, we have brought in Tata Floater, a superior fund in terms of steady returns. We decided to move Peerless Ultra Short Term, although the fund continues to return well; we find its portfolio holdings – short-term commercial papers, as well as some AA papers of less than top notch companies, may be a bit risky for an ultra short term fund. The fund is not for low-risk investors.
In the ‘Short-term Debt Fund’ category, we have added Birla Sun Life Short Term Opportunities Fund. While we talked about lowering risk in our earlier category (ultra short), we decided to provide some risk in this category. Why? Short-term debt returns may flag after a while, when a duration-based rally happens.
To make up for that, you might need corporate bonds that have the leeway to rally. Hence, the Birla addition. But do note that this fund has an exit load until 540 days, and is not suitable for holding for a period that is less than 2 years. Its double digit returns even over a 3-year period, and this speaks of what the fund is capable of delivering, albeit with some risks.
In the ‘Long-term Debt Fund’ category, we had earlier added Birla Sun Life Short Term Fund based on its corporate bond rating profile. With a more docile portfolio now, the fund may not provide duration or credit opportunities and hence, we have removed it for now. It remains a fund that outperforms its category comfortably.
We have also replaced Tata Dynamic Bond, which remains a good fund positioned to play the interest rate cycle, with a more aggressive fund – Reliance Dynamic Bond. It remains our risky bet in this category. For those looking for lower risks but wanting to play the interest rate cycle (duration call), Birla Sun Life Dynamic Bond, which is already in our list, is a good option.
Overall, we have braved ourselves to take some aggressive positioning as we believe these are interesting times in the equity and debt market. While this will help do your filters in each category, your choice of funds within the category should be determined by your time-frame of investment and your risk-taking ability. To this extent, to distinguish between funds in a category, do seek our advisors’ help in your choice.
Also, do note that this list may not contain chart toppers as our filters ensure that only stable, and not flash-of-the-pan performance is rewarded. This year, unlike 2014, will ensure that stable performers come to the fore as it may not be an easy stock-picking market. That’s one more reason to stick to consistent performers, instead of going behind funds which go through roller coaster rides and stir your portfolio.
FundsIndia’s Research team has, to the best of its ability, taken into account various factors – both quantitative measures and qualitative assessments, in an unbiased manner, while choosing the fund(s) mentioned above. However, they carry unknown risks and uncertainties linked to broad markets, as well as analysts’ expectations about future events. They should not, therefore, be the sole basis of investment decisions. To know how to read our weekly fund reviews, please click here.
- Merger of Navi Overnight Fund into Navi Liquid Fund and Navi Conservative Hybrid Fund into Navi Aggressive Hybrid Fund
- Intimation of suspension of subscription in Bandhan US Equity Fund of Fund
Winning Funds, Losing Streaks: Decoding the Mystery of Short-Term Underperformance
Wealth Conversations – November 2024- Notice of Change in Fundamental Attributes of DSP Equity & Bond Fund and DSP Quant Fund
The write-up is confusing. Can you please state clearly the following,
1. How many funds do you have as select funds? Is that a constant? If so why? If not, why?
2. What’re the funds being moved out? What was their performance? Why are they being moved out? What if I have them in my portfolio? Are you recommending a churn?
3. List all the funds that are being moved out and replaced with new funds — what’s the relative comparison?
Maybe you have addressed these in the above post. But the writing is not clear.
Hello sir,
Kindly go to http://www.fundsindia.com/select-funds and you will see the list of funds. It is not a constant. It is subject to change every quarter based on the performance of funds that enter our filters. If you need constant portfolios, pl. check our other solutions in your account or talk to our advisors. This list is only to be used to filter the 100s of funds and provide the worthy ones….as mentioned in the article itself.
2. The funds being moved out and those that are coming have been mentioned. the article also clearly mentions that none of the funds being moved out need to be exited. Fresh investments, if any can be considered in the new funds. Hence very clearly, there is no intention to churn any portfolio.
3. The article discusses the comparison. We have not listed out as investors tend to confuse the ones moved out to be ‘sell’ calls, which is not the case.
Sorry if the post is unclear. We hope to present it better next time.
thanks
Vidya
Hello Vidya,
After reading the article I also felt it is not as crisp as your previous article. It would have been far more convenient if you had added a table at the end specifying funds which are added and which are removed. I fully understand the reasoning and description for each change but it’s just that summary in the form of table would make it more clear.
Thanks,
Rachit
Rachit,
Thanks for the suggestion. Will add the table.
Good analysis, many items concur with my own. 2 suggestions on Select Funds component:
1. A brief qualitative assessment on why individual fund is selected (at least the key parameters) against each fund definitely will do value-add. Request you to consider this use case.
2. Love your segmentation of funds, instead of traditional model (diversified, thematic etc). Can you introduce drill-down at the top in addition to exhaustive listing?
Suggestions on marketplace:
1. Frequency of blogs is fine, but would like to see more insight-type articles. Examples: (i) philosophy followed by AMCs, and whether they are sticking to the set processes or not (ii) Macro-trends on distributor influence on retail investors – more of macro analysis.
2. Would like to see contrarian perspectives from investor’s point of view eg: what can hold an investor back before committing my dollar to equity markets or fixed income, or whatever.
Fundsindia is an excellent IT-enabled place, with right visionaries in Srikanth, you and others, and with right work ethics. Keep going!
Hi Bharani, thank you for taking time to give us your feedback. We will take them into account for future posts. regards, Vidya
Hello,
Its been a close watch related to markets performance and its great privilege to came across your blogs Worth to read it selective funds gives good returns but mostly i hold non selective funds in my portfolio Is there any need of switch?and whats your view on Uti dynamic bond fund and birla short term fund in debt category?I want to invest in some good debt component what is preferrable option If you can spread awareness related to stocks with proper research it may sounds good for the viewers.Good job
Hello Rahul,
If you are an investor, in future, kindly use the advisor appointment feature (under help tab in your account). Tor eview your portfolio, please write through this feature. Else, respond here and I will ask our advisors to talk to you. To answer your other question, Birla Sun Life Short Term Opportunities is relatively aggressive in the short term category. 1-2 year perspective is a must. UTI Dynamic Bond is for 3 plus years..it has a 13 year plus portfolio maturity and is reasonably well placed to ride an interest rate fall (where there will be price appreciation).
If you are a FundsIndia demat equity holder, you will receive stock calls and reports from the equity team. thanks, Vidya
Hello Vidya,
After reading the article I also felt it is not as crisp as your previous article. It would have been far more convenient if you had added a table at the end specifying funds which are added and which are removed. I fully understand the reasoning and description for each change but it’s just that summary in the form of table would make it more clear.
Thanks,
Rachit
Rachit,
Thanks for the suggestion. Will add the table.
Hello,
Its been a close watch related to markets performance and its great privilege to came across your blogs Worth to read it selective funds gives good returns but mostly i hold non selective funds in my portfolio Is there any need of switch?and whats your view on Uti dynamic bond fund and birla short term fund in debt category?I want to invest in some good debt component what is preferrable option If you can spread awareness related to stocks with proper research it may sounds good for the viewers.Good job
Hello Rahul,
If you are an investor, in future, kindly use the advisor appointment feature (under help tab in your account). Tor eview your portfolio, please write through this feature. Else, respond here and I will ask our advisors to talk to you. To answer your other question, Birla Sun Life Short Term Opportunities is relatively aggressive in the short term category. 1-2 year perspective is a must. UTI Dynamic Bond is for 3 plus years..it has a 13 year plus portfolio maturity and is reasonably well placed to ride an interest rate fall (where there will be price appreciation).
If you are a FundsIndia demat equity holder, you will receive stock calls and reports from the equity team. thanks, Vidya
The write-up is confusing. Can you please state clearly the following,
1. How many funds do you have as select funds? Is that a constant? If so why? If not, why?
2. What’re the funds being moved out? What was their performance? Why are they being moved out? What if I have them in my portfolio? Are you recommending a churn?
3. List all the funds that are being moved out and replaced with new funds — what’s the relative comparison?
Maybe you have addressed these in the above post. But the writing is not clear.
Hello sir,
Kindly go to http://www.fundsindia.com/select-funds and you will see the list of funds. It is not a constant. It is subject to change every quarter based on the performance of funds that enter our filters. If you need constant portfolios, pl. check our other solutions in your account or talk to our advisors. This list is only to be used to filter the 100s of funds and provide the worthy ones….as mentioned in the article itself.
2. The funds being moved out and those that are coming have been mentioned. the article also clearly mentions that none of the funds being moved out need to be exited. Fresh investments, if any can be considered in the new funds. Hence very clearly, there is no intention to churn any portfolio.
3. The article discusses the comparison. We have not listed out as investors tend to confuse the ones moved out to be ‘sell’ calls, which is not the case.
Sorry if the post is unclear. We hope to present it better next time.
thanks
Vidya
Good analysis, many items concur with my own. 2 suggestions on Select Funds component:
1. A brief qualitative assessment on why individual fund is selected (at least the key parameters) against each fund definitely will do value-add. Request you to consider this use case.
2. Love your segmentation of funds, instead of traditional model (diversified, thematic etc). Can you introduce drill-down at the top in addition to exhaustive listing?
Suggestions on marketplace:
1. Frequency of blogs is fine, but would like to see more insight-type articles. Examples: (i) philosophy followed by AMCs, and whether they are sticking to the set processes or not (ii) Macro-trends on distributor influence on retail investors – more of macro analysis.
2. Would like to see contrarian perspectives from investor’s point of view eg: what can hold an investor back before committing my dollar to equity markets or fixed income, or whatever.
Fundsindia is an excellent IT-enabled place, with right visionaries in Srikanth, you and others, and with right work ethics. Keep going!
Hi Bharani, thank you for taking time to give us your feedback. We will take them into account for future posts. regards, Vidya