Investors are increasing finding it difficult to pick up quality stocks because of their high valuations. In such a situation, it makes sense to be with mutual fund schemes that follow value theme and have high focus on large-sized companies. One such scheme is L&T India Value Fund.
The scheme invests 40-55 per cent of its portfolio in large-sized companies, 35-40 per cent in mid-sized companies and rest in small-sized companies. In comparison with its peers, the scheme has higher exposure to large-sized companies. Due to this, the scheme has performed well even in weak markets. In the past three- and five-year periods, the scheme has generated returns of 16.4 per cent and 26 per cent, respectively. During the same period, its category of schemes have given 12 per cent and 19 per cent, respectively.
In the past six months, the scheme’s fund managers Venugopal Manghat and Karan Desai have invested in diversified themes by selecting companies which not only have lean balance sheet, but are also placed well in terms of earnings’ growth in the coming quarters. A few prominent names are Bharat Electronics, KNR Constructions and Sun TV Networks.
Expert Take KAUSTUBH BELAPURKAR, director, fund research, Morningstar India Fund managers Venugopal Manghat and Karan Desai have built a diversified portfolio of stocks across market capitalisations with individual stock exposure capped at 4 per cent. They follow a value style approach and invest in stocks trading at a discount relative to the sector and historical valuation. This diversified value approach has led to a consistent performance for the fund in various market cycles.
