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Sunday, Jun 14, 2009
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Business Daily from THE HINDU group of publications Sunday, Jun 14, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Mutual Funds Investment World - Mutual Funds Markets - Recommendation 
Suresh Parthasarathy Investments can be considered in Tata Pure Equity Fund based on its convincing performance over a three- and five- year period. The fund managed to beat its benchmark BSE Sensex over the above time frame. Its recent performance has, however, lagged the benchmark. Tata Pure Equity seeks to invest in fundamentally undervalued large-cap stocks. During the market meltdown of last year, several large cap stocks were beaten down to valuations that were at a good discount to their peak valuations, thus providing an opportunity for the fund to accumulate these stocks. The fund added 24 stocks to its portfolio in the past three months. Large-cap stocks currently account for 80 per cent of the assets. As large cap stocks appear fairly valued post their rally beginning March, investors planning fresh investment in the fund may need to have a time horizon of at least two-three years. Performance: Tata Pure Equity has outpaced its benchmark BSE Sensex by a whopping 16 percentage points since its inception. The relative underperformance over a three- and six-month period (67 per cent and 58 per cent, respectively) could be partially attributed to the delay in moving its assets from cash to equity. During this period, funds that held higher cash position failed to replicate the performance of the bellwether indices. Tata Pure Equity also invests in stocks outside its benchmark to achieve higher returns. This strategy also helped the fund to contain losses better than its benchmark during the market correction. The fund has been consistent in its performance over a three-year period. Portfolio overview: The fund added a good number of stocks in April and May. It has 42 stocks in the latest portfolio. The three preferred sectors were capital goods, banks and petroleum products. The scheme is among the few diversified funds that have taken a bullish stance on capital goods ahead of a complete recovery. The fund also picked up undervalued auto sectors ahead of the rally and the strategy paid rich dividends. The fund continued its underweight position on the construction sector even as this space rallied the most in the past three months. More Stories on : Mutual Funds | Mutual Funds | Recommendation
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