Sharekhan Top Equity Fund Picks

January 11, 2018

Index
Top Rated Equity Funds
Large-Cap Funds •
Mid & Small-Cap Funds •
Multi-Cap Funds •
Tax-saving Funds (ELSS) •
Thematic Funds •
Balanced Funds •
BNP Paribas Equity Diversified schemes •
Fund Focus
DSP BlackRock Tax Saver Fund •
Mutual Fund Selection Criteria

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Sharekhan Sharekhan Top Equity Fund Picks

Top rated equity mutual funds

Data as on January 1, 2018
Annually compounded returns (%)
NAV 6 mths’
Scheme name Since
(Rs) returns % 1 yr 3 yrs 5 yrs
inception
Large Cap Funds
IDFC Classic Equity Fund - Reg - Growth 46 12.4 36.5 15.7 15.2 13.2
ICICI Prudential Focused Bluechip Equity Fund - Growth 41 13.6 31.8 12.3 17.0 15.7
Aditya Birla Sun Life Top 100 Fund - Growth 59 10.4 29.9 11.4 17.4 15.6
Franklin India Bluechip - Growth 461 9.5 25.4 10.8 14.1 21.6
BNP Paribas Equity Fund - Growth 86 8.2 36.0 10.4 16.7 17.6
Indices
S&P BSE Sensex 33813 9.3 26.84 7.11 11.54 16.04
Mid & Small Cap Funds
Reliance Small Cap Fund - Growth 48 28.8 62.7 25.2 34.1 23.9
Kotak Emerging Equity Scheme - Reg - Growth 42 15.7 42.3 19.4 24.7 14.3
BNP Paribas Mid Cap Fund - Growth 38 17.7 48.4 18.8 25.0 12.1
Aditya Birla Sun Life Mid Cap Fund - Growth 339 16.8 44.1 18.8 23.1 26.0
HDFC Mid-Cap Opportunities Fund - Growth 60 16.3 41.4 18.4 26.2 18.6
Indices
BSE MID CAP 17,836 22 48 20 20 22
Multi Cap Funds
DSP BlackRock Opportunities Fund - Reg - Growth 230 17.2 39.0 17.8 20.2 19.5
SBI Magnum Multi Cap Fund - Growth 49 14.9 36.3 16.4 20.9 13.8
Aditya Birla Sun Life Equity Fund - Growth 728 11.1 32.4 16.2 21.2 24.8
BNP Paribas Dividend Yield Fund - Growth 50 15.7 41.9 15.4 19.4 14.0
Kotak Select Focus Fund - Reg - Growth 33 10.4 33.4 14.6 20.1 15.6
Indices
BSE 500 14,936 13 35 12 14 15
ELSS
IDFC Tax Advantage (ELSS) Fund - Reg - Growth 59 19.4 52.7 18.0 21.6 21.8
Aditya Birla Sun Life Tax Relief 96 - Growth 32 17.8 42.2 17.2 21.9 12.6
DSP BlackRock Tax Saver Fund - Growth 48 15.1 35.4 16.2 20.4 15.5
Reliance Tax Saver (ELSS) Fund - Growth 69 18.9 45.2 13.6 22.6 17.0
Franklin India Taxshield - Growth 562 10.4 28.2 11.7 18.3 24.0
Indices
Nifty 500 9434.5 13.2 34.9 11.6 14.5 10.1
Thematic Funds
DSP BlackRock Natural Resources & New Energy Fund - Reg - Gth 37 23.9 43.4 26.3 22.8 14.5
L&T Infrastructure Fund - Reg - Growth 19 24.8 60.4 22.8 23.2 6.4
ICICI Prudential Banking and Financial Services Fund - Retail - Growth 61 7.4 43.9 17.2 21.3 21.2
Aditya Birla Sun Life Special Situations Fund - Growth 26 16.1 36.4 16.3 20.9 10.2
Franklin Build India Fund - Growth 44 17.6 42.2 16.2 26.4 19.4
Indices
Nifty 50 10,436 9.6 27.3 8.0 11.9 14.1
Balanced Funds
Reliance RSF - Balanced - Growth 55 9.7 28.7 13.3 16.5 14.6
ICICI Prudential Balanced - Growth 130 10.4 24.3 12.9 18.3 15.2
HDFC Balanced Fund - Growth 151 9.5 26.9 12.8 18.6 17.0
Aditya Birla Sun Life Balanced 95 - Growth 770 9.3 25.3 12.0 17.1 20.9
SBI Magnum Balanced Fund - Growth 128 12.4 27.0 12.0 17.7 16.4
Indices
Crisil Balanced Fund Index -- 6.6 19.1 8.5 11.0 12.6
BNP Paribas Equity Diversified schemes
Annually compounded returns (%)
NAV 6 mths’
Scheme name Since
(Rs) returns % 1 yr 3 yrs 5 yrs inception
BNP Paribas Mid Cap Fund - Growth 38 17.7 48.4 18.8 25.0 12.1
BNP Paribas Dividend Yield Fund - Growth 50 15.7 41.9 15.4 19.4 14.0
BNP Paribas Long Term Equity Fund - Growth 40 13.4 41.9 12.3 18.6 12.2
BNP Paribas Equity Fund - Growth 86 8.2 36.0 10.4 16.7 17.6
Note: Returns < 1 year - absolute, > 1 year - CAGR (compounded annual growth rate)
Disclosure: Sharekhan Limited is now part of the BNP Paribas SA group.

January 11, 2018 2

Sharekhan Sharekhan Top Equity Fund Picks

DSP BlackRock Tax Saver Fund

Objective Key features

An open-ended equity-linked savings scheme, whose • Fund category : ELSS
• Launch date : January 18, 2007
primary investment objective is to seek to generate medium
• Minimum investment : Rs. 500
to long-term capital appreciation from a diversified portfolio • Load structure : Exit Load is Nil
that is substantially constituted of equity and equity-related • Fund manager : Rohit Singhania
securities of corporates and to enable investors avail of • Latest NAV (gr) : Rs. 48.37
• Latest NAV (div) : Rs. 18.06
a deduction from total income, as permitted under the
• Expense ratio (%) : 2.51
Income Tax Act 1961, from time to time. • AUM : Rs. 3,571 crore
• Benchmark Index : Nifty 500

Scheme’s performance

DSP BlackRock Tax Saver Fund - Growth ELSS Category Average Nifty 500
40.0
37.2
35.4 34.9
35.0 Holdings by market cap
30.0
Particulars %
25.0

20.4 Nifty 50 55.7

20.0 18.6 18.3
16.2
14.5
15.5 Nifty Free Float Midcap 100 14.3
15.1 14.1 13.6
15.0 13.2
11.6
10.1
Nifty Free Float Smallcap 100 0.5
10.0
BSE Sensex -
5.0
Top 5 holdings 21.3
0.0
6 Months 1 Year 3 Years 5 Years Since Inception Top 10 holdings 33.4
Returns < 1 yr: Absolute, > 1yr: CAGR

Style box analysis

Large-cap Top 10 stock holdings (total no. of scrips: 70)

Mid-cap
Company name % of net assets
Small-cap
HDFC Bank 6.4
Growth blend value
ICICI Bank 4.0
Top 5 sectors
State Bank of India 3.8
Tata Steel 3.7
Financial Services 35.08
Gail (India) 3.5
Energy 12.07
Maruti Suzuki India 2.6
Automobile 9.45
Consumer Goods 6.87 ITC 2.5

Construction 6.68 Larsen & Toubro 2.5

Reliance Industries 2.3
0.00 10.00 20.00 30.00 40.00
Hindustan Petroleum Corporation 2.1

Scheme analysis
With a long history of more than 10 years, the MF scheme has outperformed both the benchmark Nifty 500 index and the
ELSS category average. Despite volatility and uncertainties in the market, the MF scheme has performed better than its
peers, giving a return of 16.2% over the past three years, as against 11.6% and 13.6% returns given by Nifty 500 index and
the ELSS category average, respectively, in the same period. Over five years, the MF scheme has posted a compound
annual growth rate (CAGR) of 20.4%, while Nifty 500 index and the ELSS category average have reported CAGRs of 14.5%
and 18.6%, respectively. In the recent months, the MF scheme has given a return of 15.1% compared to the 13.2% return
posted by Nifty 500 index and 14.1% return generated by the ELSS category average.
The MF scheme currently has about 70 stocks in its portfolio. It has nearly 96% of its net assets exposed to equity, while
the remaining assets are exposed to other debt and money-market instruments. The top 10 stocks form about 33% of the
MF scheme’s portfolio. The MF scheme has invested nearly 35% of its funds in the financial services sector, followed by
allocations of 12.07% and 9.45% in the energy and automobile sectors, respectively.

January 11, 2018 3

Sharekhan Sharekhan Top Equity Fund Picks

Mutual Fund Selection Criteria

Equity Mutual Funds risk-adjusted returns, whereas the information ratio

Equity Mutual Fund selection within a particular category is
done on two broad parameters, namely ‘Returns’ and ‘Risk’.
Our selection process helps to identify funds with a track
record of giving superior returns consistently compared to
the category benchmark and peers. Along with superior
returns, it is also important to factor in risk and volatility in
returns to take a holistic investment decision. Equity Mutual
Fund rating is done by giving equal weightage (20% each)
to the below mentioned risk and return parameters.
1. ‘Returns’ - measured across 1, 2 and 3 years: To rank
the funds we give a 20% weightage to performance
on absolute and relative basis (to category benchmark
and peers) across three time periods of 1 year, 2 years
and 3 years.
2. ‘Risk’ - captured through Sharpe ratio and
Information ratio: These ratios are widely used in
the Mutual Fund industry to measure risk-adjusted
returns of a Mutual Fund scheme. The Sharpe ratio
considers Standard Deviation to measure a portfolio’s
measures the ability of the portfolio manager to
provide excess returns relative to category benchmark
on a consistent basis. We give a weightage of 20%
each to both the ratios, to finally arrive at the ranking
of the fund in a particular category.
In addition to quantitative analysis, we also use qualitative
factors to filter out relatively smaller fund houses or funds
with small asset size to minimise allied risk.
Fixed Income or Debt Mutual Fund
In the Fixed Income Mutual Fund segment, the selection is
done by considering returns, along with other criteria like
credit quality, volatility, yield to maturity, modified duration,
expense ratio etc. Also, the ranking depends upon macro-
economic factors like the view on interest rates and the
economic cycle. Overall, we follow a conservative approach
while recommending Debt Mutual Funds with a clear focus
on minimising risks rather than chasing marginally excess
returns.

January 11, 2018 4

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not for circulation. The information contained in this report is intended for general information purposes only. The information
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information. The information in this report has not been prepared taking into account specific investment objectives, financial
situations and needs of any particular investor, and therefore may not be suitable for you. You should verify all scheme related
information before relying on it. Further, the selection of the Mutual Funds for the purpose of including in the indicative portfolio
does not in any way constitute any recommendation by Sharekhan Limited with respect to the prospects or performance of
these Mutual Funds. We recommend investors to seek advice from professional financial advisors.

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objectives of any of the schemes of the Fund will be achieved. Please read the Offer Document carefully in its entirety
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• The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces
affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units
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