Personal Finance

ULIP Fund Review

The best of large-caps

Dhuraivel Gunasekaran | Updated on March 31, 2019 Published on March 31, 2019

A lowdown on the performance and portfolio of the top five funds

Like mutual funds, Unit Linked Insurance Plans (ULIPs) also offer a range of fund options — equity, debt and hybrid.

Equity funds, which invest predominantly in the equity shares of companies, are further classified into large-cap, mid-cap, multi-cap, small-cap and sector funds.

Debt funds invest mainly in fixed-income instruments and are sub-categorised as liquid, short-term, long-term income and gilt funds. Hybrid funds invest in equity and debt.

Here, we look at the performance and portfolio of the top five performing large-cap equity ULIP funds.

Large-cap equity funds

The top five funds have been shortlisted based on their relative performance in the last one, three and five years.

Large-cap equity funds of ULIPs invest mainly in high-quality stocks with large market capitalisation. However, unlike mutual funds, most ULIP funds are not true to their labels.

Many large-cap ULIP funds are seen deviating from the large-cap mandate and allocating larger portion to the mid- and small-cap stocks. So, one should exercise caution when selecting the fund.

Also, before you zero-in on the fund, look at the cost structure of the ULIP. Investors can switch or invest a portion of the premium in the below-mentioned funds.

 

 

 

Bajaj Allianz Equity Growth II

Bajaj Allianz Equity Growth II — one of the flagship funds in the ULIP options of the insurer — has outperformed the funds in the large-cap ULIP category since its launch.

It has delivered 8, 15 and 15 per cent compound annualised returns during one, three and five years respectively, while the ULIP large-cap category posted 7, 13 and 13 per cent returns.

The Nifty 50 index posted 12, 16 and 13 per cent returns in the same periods. The past two to three years have been bumpy for most large-cap equity funds from ULIPs and mutual funds.

But near-term gyrations should not deter you from parking money in equity funds. Over a longer period, these funds are wealth builders and can help you beat inflation.

Top three stocks in the portfolio include HDFC Bank (7.7 per cent), Infosys (7.3 per cent) and ICICI Bank (5.6 per cent). The fund has diversified its portfolio reasonably with the top 10 stocks comprising around 50 per cent of the assets.

Bharti AXA Grow Money Plus

Launched in December 2009, the fund has delivered notable returns, especially in the bull phases. For instance, in 2014 and 2017, the fund delivered returns of 42 per cent and 38 per cent respectively, thanks to its allocation to mid-cap stocks, while the ULIP large-cap category generated returns of 37 and 30 per cent. Over the last one, three and five years, the fund posted compounded annualised returns of 9, 17 and 16 per cent returns respectively.

Reliance industries (8.4 per cent), HDFC bank (5.6 per cent) and Infosys (4.7 per cent) are the top three stocks in the portfolio.

HDFC Standard - Blue Chip

The fund has generated above-average returns during both bull and bear phases that helped deliver balanced returns over the long run.

It posted compounded annualised returns of 10, 14 and 15 per cent respectively in the last one, three and five years. Nishit Dholakia is the fund manager who cherry picks large-cap companies from the universe of BSE100 index, that can perform through economic and market cycles. HDFC Bank (9.6 per cent), Reliance Industries (7.3 per cent) and Infosys (6 per cent) are the top three stocks in the portfolio.

MAX Super Growth

The fund’s recent performance has been notable. It delivered compounded annualised returns of 14, 15 and 14 per cent respectively in the last one, three and five years.

The strategy of allocating certain portion of assets to debt helped the fund contain downsides well, but failed to generate higher returns during market rallies.

Reliance Industries, Infosys, ITC, HDFC Bank, L&T and ICICI Bank are the top five stocks.

Tata AIA Large Cap Equity

This fund has delivered compounded annualised returns of 14, 15 and 13 per cent respectively in the last one, three and five years. It holds a mix of growth and value stocks from the large-cap universe. Also, a significant portion in the mid-cap stocks spiced up returns.

HDFC Bank (8.1 per cent), Reliance Industries (7.2 per cent) and Infosys (6.4 per cent) are the top stocks, while financial, software and petroleum products are the top sectors.

Published on March 31, 2019

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