Sticking to a focused equity portfolio, which picks profitable ideas across market capitalisation with strong conviction, serves as a good investment option for investors in present market conditions. One such fund that is a good bet for mutual fund investors is SBI Focused Equity, which is managed by R Srinivasan.
This is one of the few early focused-equity schemes in the markets. The portfolio has 25 stocks of which top 10 form 48.6% of the total portfolio. This shows the level of conviction of the scheme’s fund manager. It is a well-diversified portfolio covering sectors such as financials, consumer durables, automobiles, technology and engineering. Close to 57% of the scheme’s portfolio is invested in large-sized companies while remaining is spread across mid-and small-sized companies.
Such conviction bets show desired results especially in the long term. This is reflected in the performance of the scheme in the long duration. In the past seven- and 10-year periods, the scheme has given 16.8% and 24.7%, while other schemes in this category have given 14% and 17.6%, respectively, during the same period, while its benchmark index, Nifty 500 TRI, has given 13.2% and 16.4% returns. This scheme would work for investors who believe in the power of benefiting from patient investing which pays off when bets are based on high conviction.
Portfolio change (past 6 months)
|New entrants||Complete exits||Increase in allocation|
|Adani Ports||AU Small Finance Banks||Bluestar, Bajaj Finserv|
|Bharat Heavy Electricals||Agro Tech Foods||Dixon Technologies, Kotak Mahindra|
|Westlife Develp||Sheela Foam, SBI, Interglobe Aviation|
|Bharti Airtel, HDFC Bank|
Returns (in %)
|Period||CAGR return||SIP CAGR Return||Equity Focused Fund
-AVG CAGR Return (%)
Returns peer comparison ( in %)
|SBI Focused Equity Fund||-6.57||13.19||18.72|
|Mirae Asset India Equity Fund||-2.99||16.47||19.42|
|Principal Multi Cap Growth Fund||-10.39||15.37||17.65|
Source: Accord Fintech, compiled by ETIG Database
Director (fund research), Morningstar India
The fund is a concentrated high conviction strategy investing across the capitalisation curve. R Srinivasan is an excellent stock-picker and runs a benchmark-agnostic strategy both at stock and sector levels. He focuses on investing in high growth stock and doesn’t mind paying a premium for growth. He also invests a portion of his portfolio in value plays which he believes are trading at a significant discount to their intrinsic value.