A good blend of large and mid-caps

Monday 2nd September, 2019

Article Details
Publication  The Hindu Business Line
Source  Parvatha Vardhini C
CCM  98.71
Edition  Ahmedabad | Bangalore | Chennai | Kolkata | New Delhi
Supplement   NA
MAV  177,678
Language  English
Page  6
Circulation  39,085

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|| Invesco India Growth Opportunities A good blend of largeand mid-caps The fund has outperformed its benchmark over one, threeand five-year periods PARVATHA VARDHINI C Inveso India Growth Opportunities is a good bet for investors with a moderate appetite for Tisk. Originally a large-cap-oriented fund, it was reclassified as a largeand mid-cap fund under SEBI's new classification norms in early 2018. A 65 per cent exposure to large-cap stocks helps the fund maintain stability and cap losses. The remaining 35 per cent exposure to mid-cap stocks helps provide a leg-up to returns during bull runs. The fund is benchmarked to the S&P BSE 250 the LargeMidCap 65:35 TRI Index, and has outperformed the index over one, threeand five-year periods by 1.5-3 percentage points. Strategy and performance The scheme is invested in equities to the extent of 95 per cent across market cycles and does not take high debt or cash calls even in falling or volatile marKets. When the market is on song, the equity holding is moved up to 99 per cent, 2014 and 2017 being examples. The fund also churns sectors well based on market conditions. For instance, it upped its holdings in the auto sector in 2017 to benefit from the good off-take in new vehicles after the lull due to the demonetisation and the GST move. Given the volatile market conditions this year, it has increased holdings in defensive sectors such as consumer non-durables. It follows a growth strategy and has a relatively low portfolio turnover of about 28 per cent in comparison with its peers. Although the fund scored marginally below the benchmark in the 2017 rally, it has proved its mettle in other years. For example, the scheme outperformed the benchmark in the Assets as of July 31, 2019: 1,560 crore [ 20.5% Banks ` 9.3% Software 2014 rally, the volatile markets of 2013 and 2016, as well as the fall of 201. Over longer periods of three and five years, the fund is among the top quartile of performers in the largeand mid-cap category. Portfolio choices The fund usually holds a portfolio of about 50 stocks. It tends to take a concentrated exposure of 7-8 per cent in its top holdings and about 5 per cent in other stocks in the top five. Beyond this, the holdings are fairly well-diversified. 46.1% Others Annual returns (%) Invesco India Growth Opportunities IM S&P BSE 250 LargeMidCap 65:35 TRI 8.5% Consumer non-durables -8.9 -11.5 7.9% Finance 7.7% Pharma Since its reclassification to a largeand mid-cap fund, the fund has steadily been holding 35-37 percent predominantly in mid-cap stocks and the rest in large-caps. Banks have always been the most preferred sector, though the holdings hover around 20 per cent now, declining over the past few months. The exposure is mostly to private banks such as HDFC Bank, ICICI Bank Kotak Mahindra Bank and Axis Bank. It has cut down on auto ancillary exposures over the last year, 1 year 5 106 75 9.1 3 years 5 years considering the slowdown in the auto space. At the same time, the scheme has increased its exposure to software and consumer non-durable stocks. Hindustan Unilever, which has weathered the ongoing consumption slowdown reasonably well, was added recently. Bharat Flectronics, Minda Industries, Mahindra & Mahindra Financial Services and Gujarat State Petronet are the other stocks that were added recently. The fund holds 35.4 per cent in mid-caps and 2.12 per cent in small-caps in its latest portfolio. WA AA ` Holds 35% in mid-caps ` Churns sectors well Follows growth strategy