Experts now unanimously believe that stock markets could remain range-bound this year. There is an apparent lack of enthusiasm among foreign institutional investors and uncertainty about the earnings growth picking up, which could keep the markets in a narrow trading range.
Given the uncertainty in the markets going ahead, it makes sense for investors to choose mutual fund schemes with high exposure to large-sized companies whose earnings growth may not be as volatile as their mid- and small-cap peers. One such scheme with a proven track record is Aditya Birla Sun Life Frontline Equity. The fund has distinguished itself from its peers with its consistent performance.
Managed by Mahesh Patil, the scheme has not only performed better in bull cycles but has also been able to contain a decline in portfolio returns in bear markets. Patil keeps a few things in mind before picking up stocks: reasonable price, distinguished competitive edge of a company in its industry, special focus on corporate governance and attractive valuations.
The scheme has outperformed even its peers in the past 10 years. In the past five- and 10-year periods, the scheme has given 8% and 16% returns while its benchmark, S&P BSE200, has given 7% and 13% returns, respectively, during the same period. In the past six months, Patil’s focus has been on reducing volatility in the portfolio. He has enhanced the scheme’s concentrated exposure to safer stocks, such as HDFC Bank and Maruti Suzuki.
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