Fund Review: Invesco India Growth Fund

Given the volatility in equity markets, it is crucial to be with large-sized companies because they show better earnings growth, thanks to their long-established presence in the organised part of the economy. Therefore, mutual fund investors should consider Invesco India Growth Scheme, which largely focuses on such large companies.
The scheme, managed by Taher Badshah and Amit Ganatra, is considered an all-weather equity fund. Through a bottom-up approach, the fund managers take controlled risks in all directions. For example, with respect to the benchmark index (S&P BSE100), the fund managers are up to 50 per cent overweight or underweight on a sector. There is no deviation from this norm. The fund managers' strategy is to accommodate companies based on growth and value themes, which protects severe downside in times of bear phases.
The fund managers choose stocks based on current valuation, which has to be reasonable compared with its growth prospects. In the portfolio of 36 stocks, the scheme has dedicated about 75 per cent to the growth theme, and the remaining to the value theme. Due to this strategy, the scheme has outperformed its peers and the benchmark by a good margin. In the past three- and five-year periods, the scheme has given 15 per cent and 22 per cent returns (annualised), respectively, while its category has given 9 per cent and 15 per cent during the same period.
At present, the scheme is overweight on themes such as consumer discretionary, financials and industrials, indicating that the fund managers are banking on consumption and economic recovery themes. In the past six months, the fund managers have bought companies from across sectors.