There are 14 diversified equity funds with assets (total money available for investment) over Rs 1,000 crore.
In October, when the stock market turned volatile, Prudential ICICI Infrastructure fared the worst, followed by Reliance Growth and Reliance Equity Opportunities.
On the other end of the spectrum, HDFC Equity and Franklin India Prima fared the best.
Where they invest
A few similarities exist between these funds.
All are diversified equity funds that will invest in the shares of companies of various sectors.
Most of them have a large-cap dominated portfolio (total investments) with a very minor allocation to small-cap stocks.
However, the actual portfolio differs greatly amongst these players.
HDFC Premier Multi-Cap, for instance, maintains a highly concentrated portfolio (lots of money invested in few stocks). As per the September 2005 portfolio, the fund held just 21 stocks. The top three stocks accounted for more than 9% of the total portfolio.
On the other hand, you have Fidelity Equity which has 103 stocks, with no single stock accounting for more than 4.94% of the assets.
So while HDFC Premier Multi-Cap is more riskier than Fidelity Equity, the potential for returns is higher.
In Fidelity Equity, even if a stock or two does really well, it will not make much of a difference since a small amount is invested in it. However, if a stock does well in HDFC Premier Multi-Cap, the chances of the fund delivering higher returns is greater since huge amounts would be invested in it.
Also, the preference for sectors differs.
Fidelity Equity has around 20% of its total investments in technology while HDFC Premier Multi-Cap, almost 26%. Franklin India Flexi Cap has only 12% it total investments in tech stocks but almost 19% in the financial sector.
When you pick up a fund, go through the portfolio to ensure that it is different from a fund you already have invested in. If you invest in two funds, both of which have invested heavily in tech stocks, you will end up with a large exposure to tech stocks. Something you may not desire at all.
A brief snapshot
Here's a look at how the big boys in the mutual fund industry are faring.
Assets Under Management: The amount of money being managed by the fund. This figure is as on September 25, 2005. Fidelity Equity is the richest fund with the highest amount of money being managed.
Net Asset Value and returns are as on November 18, 2005.
The returns of each fund must be compared with the average returns of diversified equity funds.
1-month returns: 4.53%
3-month returns: 6.23%
1-year returns: 51.69%
Fidelity Equity
NAV: 13.369
AUM: Rs 2,543.92 crore
1-month returns: 5.02%
3-month returns: 6.92%
1-year returns: Not applicable (fund not yet completed this period)
Magnum MultiCap
NAV: 10.38
AUM: Rs 2,101.92 crore
1-month returns: 5.06%
3-month returns: Not applicable
1-year returns: Not applicable
Franklin Flexi Cap
NAV: 13.46
AUM: Rs 2,078.74 crore
1-month returns: 5.9%
3-month returns: 11.33%
1-year returns: Not applicable
Franklin India Prima
NAV: 160.94
AUM: Rs 1,939.87 crore
1-month returns: 4.94%
3-month returns: 7.73%
1-year returns: 68.61%
Reliance Equity Opportunities
NAV: 12.92
AUM: Rs 1,862.35 crore
1-month returns: 4.7%
3-month returns: 5.65%
1-year returns: Not applicable
Franklin India Bluechip
NAV: 84.07
AUM: Rs 1,771.04 crore
1-month returns: 6.42%
3-month returns: 9.98%
1-year returns: 45.65%
Reliance Growth
NAV: 171.54
AUM: Rs 1,692.12 crore
1-month returns: 3.69%
3-month returns: 4.93%
1-year returns: 75.96%
UTI Mastershare
NAV: 25.28
AUM: Rs 1,625.3 crore
1-month returns: 4.42%
3-month returns: 7.16
1-year returns: 38.90%
HDFC Equity
NAV: 95.76
AUM: Rs 1,524.24 crore
1-month returns: 7.45%
3-month returns: 14.36%
1-year returns: 61.50%
Prudential ICICI Infrastructure
NAV: 10.53
AUM: Rs 1,422.78 crore
1-month returns: 4.26%
3-month returns: Not applicable
1-year returns: Not applicable
UTI Equity
NAV: 24.21
AUM: Rs 1,420.15 crore
1-month returns: 4.13%
3-month returns: 6.42%
1-year returns: 44.47%
HSBC Equity
NAV: 47.53
AUM: Rs 1,268.31 crore
1-month returns: 5.82%
3-month returns: 9.16%
1-year returns: 45.91%
HDFC Premier Multi-Cap
NAV: 13.26
AUM: Rs 1,242.3 crore
1-month returns: 7%
3-month returns: 8.52%
1-year returns: Not applicable
HDFC Capital Builder
NAV: 48.49
AUM: Rs 1,039.3 crore
1-month returns: 3.97%
3-month returns: 8.96%
1-year returns: 57.84%
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