5 Funds that held up better in 2011’s weak market

Swapnil Suvarna discovers five funds which have contained losses against their respective benchmark during the year 2011.

As the year 2011 comes to an end, the Indian equity market has been very weak led by a series of negative events domestically as well as globally. During the year, the Sensex and Nifty ended down 23 percent which in turn has impacted the equity diversified category too. However, out of the 193 equity diversified funds which have been in existence before January 2011, 133 funds have restricted loses against their respective benchmark. We bring you five funds that helped contain losses better than others:

Sundaram Select SmallCap (AUM: Rs. 300 crore)

• Fund Manager: Satish Ramanathan
• Maintains a dynamic portfolio consisting of smaller companies with low business risk and index heavyweights available at attractive valuation
• Portfolio constitutes mainly of scripts which are high on quality and liquidity
• Since September 2011, the fund has maintained an exposure of around 24 percent in corporate debts and over 65 percent in equities
• Management has been chasing consumer driven sectors like auto ancillary, banks, telecommunication, household products, leather, tea/coffee

Reliance SmallCap (AUM: Rs. 508 crore)

• Fund Manager: Sunil Singhania;
• Invests in mid- and small-cap stocks with strong business model but still in a high growth phase and from emerging new sectors; other equities occupy 10 percent of the portfolio
• Shown conviction in potential high growth young companies which were picked at attractive levels
• Primarily focuses on buy and hold strategy
• Benefited from investing in least favored sectors like ship building, dyes & pigments, cements & construction materials, bearings, real estate, chemicals

SBI Magnum Emerging Businesses (AUM: Rs. 429 crore)

• Fund Manager: R Srinivasan
• Biased towards sectors which are driven by consumer demand and sunrise sectors having attractive business environment with growth opportunity
• Stayed away from those sectors which were interest rate sensitive and benefited from smart contrarian calls
• Opportunistic investment in fundamentally sound companies at attractive levels has paid off superbly
• Primarily invested in sectors like textile, consumer durables, tyres & allied, cement & construction material

Mirae Asset Emerging BlueChip (AUM: Rs. 96 crore)

• Fund Manager: Gopal Agarwal, Neelesh Surana
• Portfolio constitutes of value and strategic opportunistic picks
• Maintains buy and hold strategy but follows a strategy of systematic profit booking depending upon the valuations and business policies
• Management holds a high quality diverse portfolio favoring sectors like pharmaceutical, IT, banks, logistics, pesticides & agrochemicals, consumer food, watches, paints

DSPBR MicroCap (AUM: Rs. 426 crore)

• Fund Manager: Apoorva Shah, Vinit Sambre, Mehul Jani
• Invests in equities which are not part of top 300 companies by market capitalization, under-researched and least favored stocks
• The management invested in attractive quality sector and stocks which are high on quality; besides, shown conviction in their stock selection which has enhanced the fund performance
• Favors sectors which are consumer driven and major contributors to GDP like pharmaceutical, IT, pesticides & agrochemicals, engineering, textile, banks