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What are India’s three biggest equity mutual funds planning?

LiveMint logoLiveMint 17-05-2017 Kayezad E. Adajania

Rising markets and increased inflows have seen assets under management (AUM) of equity funds soar. We look at the three largest equity funds, how have their fund managers invested so far and how are they geared for the next 3 years. We have excluded balanced funds—some are larger than the largest pure-equity funds—because we believe balanced funds ought to become more balanced in asset allocation than at present. There are 12 pure-equity funds with assets in excess of Rs10,000 crore, up from just three at the end of 2014.

Vipul Sharma/Mint

AUM: Rs18,585 crore

Prashant Jain, executive director and chief investment officer (CIO), HDFC Asset Management Co. Ltd: “The scheme’s portfolio is geared for a recovery in capital expenditure. It is geared for low interest rates; capital expenditure intensive businesses will do well when interest rates are low. It is also geared for low inflation as it would keep interest rates low and currency will not depreciate. The portfolio is also geared for a stable currency. We hold both state-owned and private-sector banks but apart from HDFC Ltd and REC Ltd; we don’t hold any non-banking finance corporation (NBFC). Our portfolios have been stable.”

AUM: Rs17,306 crore

Mrinal Singh, deputy CIO-equity, ICICI Prudential Asset Management Co. Ltd: “The fund will continue to invest into out of favour, undervalued stocks and sectors. The strategy continues to be value-biased.... This approach has worked well for the fund in the past and we believe it will hold true even in future as well.

On the sectoral front, technology, pharmaceuticals and industrials are three areas we are overweight in. Due to recent negative expectations on the policy front, information technology-software sector has seen corrections, making valuations attractive. Same is the case with pharmaceuticals. The sector has witnessed correction due to regulatory headwinds, government policies and currency strengthening. The preference is towards beaten down generics.”

AUM: Rs16,961.75 crore

Mahesh Patil, co-CIO, Birla Sun Life Mutual Fund: “The endeavour would be to outperform the index through nimble footed approach, both on allocation to sectors and stock selection, as we did in owning private sectors banks and NBFCs.... The strategy would be to identify mispricing and take exposure; continue to participate in multi-year themes like increase in purchase of home building materials and low-ticket consumer discretionary items due to ‘housing for all’ and market share gain by organized players due to GST. The focus on quality companies also helps to ride the volatility better.”

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