In both these cases, we notice no large-cap fund in the portfolio. Large cap funds should ideally form the core of a portfolio. A list of rated large-cap funds can be accessed here.
I have a moderate risk appetite. My horizon is 10 years. My current SIP allocations are as follows:
- Aditya Birla SL Equity: Rs 3,500
- Franklin India Smaller Companies: Rs 3,000
- IDFC Multi Cap: Rs 3,500
- L&T India Value: Rs 1,000
- Aditya Birla SL Tax Relief 96: Rs 6,000
- L&T Tax Advantage: Rs 6,000
- Sreyashi
The funds you have named are fairly well managed strategies. Here are the few highlighting points and also take a look at the brief analyst notes.
Aditya Birla SL Equity has a multicap mandate and can tend to invest about 30%-40% of the portfolio in small- and mid-cap names.The fund runs a lower downside risk as compared with its category peers and upside capture ratio, on the other hand, is significantly higher compared with the category peers across the three periods, indicating that the fund outperforms the benchmark during positive market cycles.
Franklin India Smaller Companies is from Small cap category which is an extremely volatile depending on market conditions. It is important to note here that the fund manager R Jankiraman is an able manager and conversant with the risks associated while investing. Under him the asset size has grown steadily with the fund’s superior risk adjusted returns.
IDFC Multi Cap (erstwhile IDFC Premier Equity) was a Small and Mid cap earlier but now it is positioned as a Multicap fund. This fund is managed by Anoop Bhaskar who is a seasoned manager and has managed Large-cap as well as mid-cap strategies with reasonable success.
L&T India Value Fund is a value strategy. The market-cap allocation of the portfolio can vary significantly with large caps typically falling in the range of 40%-60% based on valuations. Although the core philosophy of the fund has remained consistent; it has been witnessing changes in terms of the number of holdings, market cap break-up and concentration levels over the past couple of years.
L&T Tax Advantage managed by head of equities Soumendra Nath Lahiri is a Bronze rated fund. The allocation across market capitalisation can change significantly depending on the performance of companies. The fund is prone to large underweight or overweight positions at a sector level given the benchmark-agnostic style of investing.
Our analysts' views can be read here.
What are your views on my SIPs? I started 3 months ago.
- Axis Focussed 25: Rs 3,000
- Invesco Growth Opportunities: Rs 2,500
- Tata Equity P/E: Rs 2,000
- IDFC Sterling Value: Rs 1,500
- L&T Emerging Business: Rs 1,500
- Satbir
The funds you have chosen offer differing investment mandates.
Axis Focussed Equity 25 is a focused fund which is run with a concentrated investment mandate. The investment style is an aggressive one and is apt for investors with a high-risk appetite. You might have to look at whether this fund, given its investment approach, fits into your risk appetite or not.
Invesco Growth Opportunities Fund is from a Large and Midcap category. The mandate of this category is to maintain a minimum of 35% of assets in each large cap as well as mid cap stocks. This fund maintains a higher allocation to large cap stocks at around 60-65%. If the fund is apt for your portfolio, you can continue your investment in it.
Although Tata Equity P/E Fund and IDFC Sterling are both part of value category, their investment patterns are strikingly different. While Tata Equity P/E adopts a multi-cap approach depending on which segment is attractively placed on valuation, IDFC Sterling has historically been a predominantly mid/small cap fund.
When IDFC Sterling Equity was a part of Morningstar’s small/mid-cap category it was rated as Silver. This fund is managed by Anoop Bhaskar whom we rate highly as a fund manager. We are in the process of reviewing the Morningstar analyst rating on this fund and will be out with updated rating on it soon. It should also be noted that while value funds may not perform well in momentum driven markets such as that of 2017, they tend to do well during market downturns.
L&T Emerging Business is from a small-cap category. Again, such funds offer a high risk-high return investment proposition. These funds can get exposed to above average volatility during market downturn or when small-cap stocks lose their sheen. The aptness of this fund in your portfolio and allocation to it would depend on your risk appetite.
Investments in equity-oriented funds must be made with a long-term investment horizon, preferably not less than 5 years.
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