Profiting from the Best Value Picks
Tuesday 10th September, 2019
|| The Economic Times
GOL Invesco India Contra Fund (G) Profiting from the Best Value Picks For the past five years, earnings growth has missed consensus estimates of analysts. Even this year, it seems the situation may not change much. A key factor which requires consideration is valuation of the broad benchmark indices. Today, the Nifty 50 index is trading at price to earnings (P/E) multiple of 27 times. This is still an 11% premium to the valuation three years ago, and 28.7% to the valuation five years ago. This shows that the Nifty P/E does not adequately reflect the climate of economic slowdown. In such a sitvation, it is important to follow the tenet of value investing. Among schemes, which follow this approach and have performed wellis Invesco India Cantra Fiind Inthe nact fivayear and 10-year periods, tl and 13.3% returns, respecth category have given averag % over the same periods. One of the factors which h performance even in the sh focus of the scheme's fund Ganatra and Taher Badshar to either sector leaders or t best in an industry even in category. This focus has pai even in the highly bearish phase of markets. In the past six months, the fund managers have clearly enhanced focus on such stocks. ~ Rajesh Naidu/ - ET Intelligence Group ' ~ PORTFOLIO CHANGE (PAST 6 MONTHS) New Entrants Complete Exits Increase in Allocation Ambuja Cements | ONGC | cDsL Ashok Leyland Parag Milk Foods | Mphasis Coal India Zee Entertainment Mahindra & Mahindra RETURNS (in %) CONTRA FUND AVERAGE PERIOD CAGR RETURN SIP CAGR RETURN CAGR RETURN (%) 1 Year | -9.24 | -6.98 | -7.24 3Year | 832 | 340 | . 844 5Year | 10.6 | 8.38 | 9.73 RETURNS PEER COMPARISON (in %) . | TYEAR 3-YEAR 5-YEAR Kotak India EQ Contra Fund-Regular | -5.24 8.56 | 8.85 L&TIndiaValueFund ~ [-11.92 | 43851009 Tata Equity PE Fund Regular Plan |-10.99 6.49 | 10.02 Source: Accord Fintech, Compiled by ETIG Database VISHAL DHAWAN, Expert Take CFP Plan Ahead Wealth Advisors Typically, we see very few schemes which follow value investing in true sense. The fund has been buying value stocks and hotding them till the value plays out. The fund managers follow this rule carefully. They have no preference for market capitalisation. For investors looking to supplement their portfolio with a value or contra style, this scheme is a good choice.