The Hindu Business Line : Catching up with the rest

Diversified funds that earlier trailed their theme-based peers appear to be catching up with the latter as the rally now seems restricted to a few sectors. Three of the top 10 funds were from the diversified category. Here is a look at the portfolio reshuffles in Sundaram BNP Paribas Select Focus and Tata Infrastructure over the past year.

Sundaram BNP Paribas Select Focus: The fund predominantly invests in large-cap stocks and, at times, takes concentrated exposures to stocks. Even as the fund’s NAV grew by 40 per cent over the last quarter, its assets under management moved up only 10 per cent to Rs 367 crore, indicating some outflow.

Currently, energy, metals and financial services — the top three sectors — account for 64 per cent of the assets under management. The fund pruned its exposure auto and cement stocks when these sectors underperformed the market.

In the past six months the exposure to the energy sector has nearly doubled. Cairn Energy, Reliance Energy, Lanco Infratech and Reliance Petroleum were the new additions, while exposure to Reliance Industries was reduced. The IT sector, which has been underperforming in recent times, lost the fund’s fancy and was phased out completely. Telecom stocks that surged in the past six months witnessed some profit-booking. In the commodity space, the fund stepped up exposure to metals with the inclusion of Sesa Goa.

Tata Infrastructure: The fund has a mandate to invest at least 70 per cent of its assets under management (AUM) in the stocks of infrastructure companies and the rest in debt and money market instruments. During the past six months the fund’s NAV and AUM grew by 50 per cent. The fund has invested close to one fourth of its assets in capital goods that comprises 14 stocks of engineering and power equipment companies.

Power sector and metals together accounted for 20 per cent of the portfolio. The fund normally adopts a buy-and-hold strategy, with occasional profit-booking. The fund pruned its exposure to the cement sector from an average of 17 per cent to 4 per cent of assets in the past six months. Century Textiles and Grasim Industries are new additions in the latest portfolio.

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