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Canara Robeco Emerging Equities: Superlative performer
Wed, Jun 21, 2017
Source : Yash Jashnani, Citrus Interactive

Canara Robeco Emerging Equities Fund is an open ended mid cap equity fund. The objective of the scheme is to generate capital appreciation by primarily investing in diversified mid-cap stocks. The fund is benchmarked against Nifty Free Float Midcap 100. The fund has an AUM of Rs 1,896 crore as on 31st May 2017 which has increased by Rs 858 crore as compared to last year 31st May 2016. The fund was launched on 11th March 2005.

Performance

The fund’s performance across various time horizons is extremely good as seen in the table given below. It has beaten its benchmark as well as the equity throughout the time horizon in all time periods. It has also managed to be among the top 10 funds in all the periods.

Scheme Name

YTD

6 Months

1 Year

3 Years

5 Years

Since Inception

Canara Robeco Emerging Equities Fund

29.48

25.93

38.79

29.41

30.24

18.96

Nifty Free Float Midcap 100

22.01

17.46

31.73

19.93

20.47

15.19

Category Average

19.85

17.26

25.43

17.98

20.62

NA

Rank

3/155

3/155

10/155

7/145

6/137

NA

Figures are in % as on 31st May 2017; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

In terms of the calendar year returns as well the fund has given good performance. It has beaten its benchmark in each of the last 5 years except 2016. It has done better than the equity diversified category in all the years except 2013 and 2016. The magnitude of outperformance was significant in 2014.

Scheme Name

2012

2013

2014

2015

2016

Canara Robeco Emerging Equities Fund

48.89

3.16

96.02

13.06

2.56

 Nifty Free Float Midcap 100

39.16

-5.1

55.91

6.46

7.13

Category Average

33.94

5.17

54.28

3.64

4.56

Rank

9/137

102/140

6/143

12/151

105/157

All figures in %

Risk: In terms of measures of risk such as Standard Deviation and Beta (measured over the last 3 years), the fund has taken higher risk compared to category median.

 

Standard Deviation

Beta

Canara Robeco Emerging Equities Fund

1.08

0.93

Category Median

0.92

0.92

Risk-Adjusted Return: In terms of Treynor and Sharpe (measured over the last 3 years), the fund has provided higher risk-adjusted returns than the category median.

 

Treynor

Sharpe

Canara Robeco Emerging Equities Fund

0.15

0.14

Category Median

0.09

0.08

 Portfolio

Sector concentration: The fund’s concentration in the top 3, 5 and 10 sectors is lower than the category median.

 

Top 3

Top 5

Top 10

Canara Robeco Emerging Equities Fund

18.56

25.94

40.39

Category Median

32.41

43.9

63.61

Company concentration: The fund’s Concentration in the top 3, 5 and 10 companies is lower than the category median.

 

Top 3

Top 5

Top 10

Canara Robeco Emerging Equities Fund

8.67

13.38

23.78

Category Median

16.38

24.83

41.64

Number of Equity Holdings: The Fund currently holds 71 stocks in its portfolio (31st March 2017), which is higher than the median stock count for the equity diversified category, which currently stands at 46. In the last 5 years the number of equity holding averages to 60.

Cash Equivalent:        

Its cash equivalent for March 2017 is 9.20%. The average cash allocation for the last five years is 6.19%. Its maximum allocation to cash over the last two years is 11.33% in February 2017 and lowest was 0.94% in February 2015.

Portfolio Characteristics

The top 5 sectors include Chemicals, Bank – Private, Auto Ancillary, Bank – Public and Construction – Real Estate.

In the last 6 months the fund has bought ABB India Ltd., Aurobindo Pharma Ltd., Bajaj Finance Ltd., Can Fin Homes Ltd., Cummins India Ltd., ICICI Bank Ltd., KNR Construction Ltd., Mahindra & Mahindra Financial Services Ltd., Max Financial Services Ltd., Monsanto India Ltd., PI Industries Ltd., Piramal Enterprises Ltd., Punjab National Bank, PVR Ltd., RBL Bank Ltd., Rural Electrification Corporation Ltd., SH Kelkar & Co Ltd., Sudarshan Chemical Industries Ltd., Sundram Fasteners Ltd., Thyrocare Technologies Ltd., UPL Ltd. and Vinati Organics Ltd.

In the last 6 months the fund has sold stocks of Asahi India Glass Ltd., Century Textiles & Industries Ltd., Cholamandalam Investment & Finance Company Ltd., Cipla Ltd., DCB Bank Ltd., Divis Laboratories Ltd., Eveready Industries (India) Ltd., Indraprastha Gas Ltd., Kalpataru Power Transmission Ltd., L&T Finance Holdings Ltd., L&T Technology Services Ltd., Natco Pharma Ltd., NIIT Ltd., Orient Cement Ltd., PNC Infratech Ltd, Prabhat Dairy Ltd. Sanghvi Movers Ltd. and Skipper Ltd.

Stocks of Arvind Ltd., CESC Ltd., HCL Technologies Ltd., Infosys Ltd., NCC Ltd. and Tata Global Beverages Ltd. have been bought and sold.  

Process

The fund is an open ended mid cap fund with an objective to generate long term capital appreciation by primarily investing in diversified mid cap stocks that have potential to emerge as bigger corporates with higher performance. The scheme will essentially be focusing on corporates which have huge potential to emerge as bigger corporates with robust performance.

The companies forming a part of the fund’s portfolio, would have market capitalization between the highest and lowest components of the underlying benchmark, and may or may not be a constituent of the underlying benchmark.

The fund manager of the Scheme is responsible for making buy / sell decisions for the fund's portfolio and seeks to develop a well-diversified portfolio taking into account the asset allocation patterns of various schemes along with risks that are associated with such investments. The investment decisions are made on an ongoing basis keeping in view the market conditions and other regulatory aspects.

The fund would invest 65 – 100% of its assets in midcap equity and equity related instruments falling within the market capitalization range of the underlying benchmark. 0 – 35% would be invested in equity and equity related instruments of companies not falling within the market capitalization of the underlying benchmark. 

The fund would invest 0 – 35% in debt and money market instruments.

Fund Manager

Mr. Ravi Gopalakrishnan serves as the Head of Equities and Fund Manager at Canara Robeco Asset Management Company Ltd. He has been managing the fund since September 2012.

He served as Head of Equity, Chief Investment Officer of Equity, Portfolio Manager and Executive Director at DHFL Pramerica Mutual Fund - DHFL Pramerica Large Cap Equity Fund, DHFL Pramerica Mutual Fund - DHFL Pramerica Dynamic Asset Allocation Fund and DHFL Pramerica Mutual Fund - DHFL Pramerica Dynamic Asset Allocation Fund.

Mr. Gopalakrishnan served as Chief Investment Officer of Equities, Portfolio Manager and Executive Director at DHFL Pramerica Asset Managers Private Limited from September 2009 to August 2012, where he was responsible for managing equity portfolios and for the equity research function.

Prior to that, Mr. Gopalakrishnan served as a Portfolio Advisor at Hudson Fairfax Group LP from March 2006 to January 2009 and advised on their investments in India, risk management strategies, and marketing of funds to world-wide institutional investors.

Before that, Mr. Gopalakrishnan served as the Head of Portfolio Management Services at Principal PNB Asset Management Company Private Limited from May 2005 to March 2006. In this role, he managed and advised portfolios for institutional and individual investors.

Mr. Gopalakrishnan served as the Head of PMS at Tata Asset Management Limited from September 2004 to November 2004, where he managed portfolios for corporate and individual investors. Mr. Gopalakrishnan served as a Fund Manager of Equities at Sun F&C Asset Management (India) Pvt. Ltd. from April 2000 to May 2004. He served as a Strategist of India at UBS Warburg Dillon Read Securities (I) Pvt. Ltd. from December 1994 to April 2000. In this role, Mr. Gopalakrishnan had the responsibility of setting up the research operations and for developing its India strategy and institutional sales desk. He served at UBS Group AG. He served as a Director of DHFL Pramerica Asset Managers Private Limited.

He received an MBA in Finance from Bradley University. Mr. Gopalakrishnan also earned an MS in Finance from Drexel University in 1990.

Our View

Canara Robeco Emerging Equities has proved itself as a consistent performer in the mid cap mutual funds universe. It maintains a highly diversified portfolio. It has a relatively lower size compared to many mid cap funds in the peer group –which is also a positive. It can be considered for the mid cap allocation in your portfolio.

 

 
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