Canara Robeco Equity Diversified Fund: Invest

Suresh Parthasarathy | Updated on: Mar 12, 2018

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Investors can consider accumulating the units of Canara Robeco Equity Diversified Fund based on its consistent performance across market cycles. The fund bettered its benchmark over three and five-year periods.

Over a five-year period, the fund clocked compounded annualised return of 16.2 per cent and outpaced its benchmark BSE 200 by six percentage points. Without aggressively churning the portfolio and with lower beta, the fund handsomely rewarded its systematic investment plan investors too. Over a five-year period SIP investors in the fund earned 16.5 per cent annually as against benchmark return of 8.7 per cent.

The fund seeks to provide a blend of growth and value style of investing and predominantly invests in large-cap stocks with marginal exposure to mid cap stocks. The mid-cap exposure though has been limited and not hurt the fund too much during recent corrections. However, during the 2008 correction the fund with mid cap exposure contained declines better than the Sensex, its 50 per cent fall is steeper than declines witnessed by large-cap funds. The fund, with its mid-cap exposure has a slightly higher risk profile than a large-cap fund.

Given its investment strategy, the fund is ideal for investors willing to take some exposure to mid- and small-cap stocks to earn a few percentage points more than pure large-cap funds. The average market capitalisation of stock held at over Rs 51,000 crore though provides comfort.

Performance: Over a one-year period with market turning volatile, large cap indices BSE Sensex and CNX Nifty lost 7 per cent in absolute terms. However, Canara Robeco Equity Diversified's NAV declined by 3 per cent against 9 per cent lost by its benchmark, BSE 200. Although the fund has not actively churned the portfolio, it has reduced holdings in underperforming stocks, containing losses better than broad markets.

Portfolio Overview: The fund's top three sectors banks, consumer non-durables and pharma accounted for 39 per cent of the assets. The fund increased its exposure to banking stocks from 12 per cent to 19 per cent.

The fund saw change in management few months ago and it's now managed by Mr Soumendra Nath Lahiri. Investors taking fresh exposure need to track performance closely for the next couple of quarters, given the recent change.

Published on August 20, 2011
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