Canara Robeco Large Cap+ : Hold

Launched in August 2010, Canara Robeco Large Cap+ benefited from catching stocks on the downturn, with the market sliding from November 2010 and throughout the following year. The fund aims to primarily invest in large-cap stocks, though debt allocation can go up to 35 per cent.

Investment in blue-chips lowers the fund’s risk profile and volatility in returns — the average market capitalisation of the March portfolio, for instance, stood at Rs 80,608 crore.

Investors can retain their holdings in the fund. Units can be bought if the fund maintains its current track record of beating its benchmark consistently over the next year.

Performance

Over a two-year period, the fund has clocked an annualised return of 5 per cent, ahead of both its benchmark BSE 500’s 1 per cent decline and the Nifty’s nil returns.

Over a one-year period, the fund’s return just about matched its benchmark at 13 per cent. This, it owes to holding stocks such as Infosys and Larsen & Toubro which fell sharply and quickly, while reducing stakes of star performers such as HDFC Bank.

But on a rolling return basis (since its inception), the fund has done better than its benchmark about 96 per cent of the time, underlining its ability to deliver consistent returns.

During the market downturn of 2011, it contained losses to 13 per cent against the benchmark’s 23 per cent.

Returns for the one and two-year periods are in line with what peers such as ICICI Focused Bluechip and Franklin India Bluechip delivered.

Portfolio

The fund sports around 40 stocks in its portfolio. Concentration in stocks is limited, with the top ten stocks making up 40-50 per cent of the portfolio. Holdings in equities usually hover between 93 and 97 per cent, but the fund prunes this from time to time.

For instance, it raised debt and CBLO holdings in mid-2011 before deploying it back into equities. Similarly, it added CD from Vijaya Bank to the tune of 9 per cent of the portfolio in March, while holding 4 per cent in cash the month before. Equity holding thus dropped below 90 per cent, which may be a prudent strategy given the current volatile markets.

During January-March 2013, the fund stocked up on software companies such as Infosys, TCS and HCL Technologies with the sector accounting for 14 per cent of the portfolio by March against the 10 per cent in January.

Meanwhile, it cut down on bank holdings, with the sector’s share dropping 5 percentage points to 16 per cent, with holding in HDFC Bank dropping the most. Even so, the banking and finance sector still accounts for the highest share at 24 per cent. It also began to prune the share of FMCG stocks. The fund rightly reduced exposure to oil and consumer durables stocks in 2012, which turned out to be underperformers. Similarly, it added FMCG stocks in 2011, while reducing holdings in power companies.

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