After a sedate performance during 2010-14, Canara Robeco Large Cap+ Fund has improved in the last 15 months. The fund’s defensive strategy, which impacted returns during the 2013-14 rally, came to its rescue when the market turned volatile in 2015, leading to the turnaround.

The fund may not be the best-in-class and may not be the best choice for those chasing high returns. However, the fund has contained losses in a volatile market and delivered reasonable gains over the long term. While fresh investments can be avoided, investors who have already bought units can hold on to their investment and watch the sustainability of the fund’s performance over the next year.

In the last 15 months, the scheme has consistently delivered benchmark beating returns. Its daily annual returns since November 2014 have been higher than its benchmark S&P BSE 100 Index almost 98 per cent of the time. This is higher than the 74 per cent consistency achieved by the fund in the last five years. Since December 2014, the fund has reduced exposure to underperformers, such as banks, and financials and upped its holding in FMCG, auto ancillaries and cement stocks.

All these have helped the fund better its performance. Exiting Vedanta, Bank of India and Crompton Greaves also helped arrest the fall in NAV.

Even as the broad markets have been volatile in the past year, with the S&P BSE 100 Index losing over 4 per cent, the fund has been able to cap its losses at about 2.8 per cent.

Large-cap slant Historically, the fund has contained downsides during market falls better than its benchmark, thanks to its defensive strategy and a higher large-cap slant.

Consider the January-August 2013 period; even as the benchmark declined 11 per cent during this period, the fund was able to arrest the fall in its NAV to 8 per cent. The fund’s mandate to invest about two-thirds of its assets in large-cap stocks at any given time has helped it tide over volatile phases. Currently, over 90 per cent of the scheme’s assets are in large-cap stocks; this will help the fund stay afloat should the market remain turbulent.

The fund ranks in the mid quartile on a risk adjusted return basis. Its expense ratio as of March 2016 stood at 2.79 per cent, higher than the average of other funds in the category and has also been a drag on the fund’s performance.

In the past year, the fund has increased exposure to auto, oil and gas, industrial capital goods and has pruned holdings in banks, financials, IT and pharma.

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