Mutual Funds

BNP Paribas Equity: Buy

Yoganand D | Updated on: Sep 28, 2014
image caption

The fund avoids concentrated bets on individual stocks or sectors

Investors can buy the units of BNP Paribas Equity, a large-cap fund that has outperformed its benchmark, CNX Nifty, consistently. It has delivered 4-6 percentage points higher than its benchmark over three- and five-year time-frames.

While a bulk of its portfolio is invested in large-cap stocks, the fund takes minor exposure of up to 10-15 per cent in the mid-cap pack as well.

By maintaining a large portfolio of 50-60 stocks, the fund is well-diversified and avoids any concentrated bets on individual stocks or sectors. During highly volatile markets, the scheme also takes cash position to the tune of 10 per cent of its portfolio, thus making it quite a safe bet.

BNP Paribas Equity has been a top-quartile performer across time periods.

It has done better than the likes of UTI Top 100, DSPBR Top 100 and JP Morgan India Equity over the past five years.

Investments in the fund can be made through the systematic route as well.

Portfolio and strategy

The fund juggles sectors favoured by the markets, while also betting on defensives to ride rallies as well as corrections reasonably well. In the last few years, it has managed to rotate sectors such as power, consumer non-durables and software depending on market conditions and has generally got its bets right. In recent times, banks are back in favour and account for 18 per cent of its portfolio currently. Consistently holding on to the likes of HDFC Bank and ICICI Bank has paid off well as the stocks have recorded good returns over the past one year.

BNP Paripas Equity also churns the stocks of Infosys, TCS and Wipro on a regular basis.

The fund decreased its allocation to the power sector during mid-2009 and subsequently raised its allocation to consumer non-durables.

Investment in ITC and Hindustan Unilever turned into lucrative bets, though it exited these stocks later on as valuations soared. Bharti Airtel and Idea Cellular are its other key holdings. Quality names from the mid-cap space such as Balkrishna Industries, Motherson Sumi Systems and VA Tech Wabag figure in its portfolio as does Wonderla Holidays which made a strong debut in the markets recently.

Published on November 22, 2014

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you