SBI Focused Equity Fund: Fund review

Sticking to a focused equity portfolio, which picks profitable ideas across market capitalisation with strong conviction, serves as a good investment option for investors in present market conditions. One such fund that is a good bet for mutual fund investors is SBI Focused Equity, which is managed by R Srinivasan.

This is one of the few early focused-equity schemes in the markets. The portfolio has 25 stocks of which top 10 form 48.6% of the total portfolio. This shows the level of conviction of the scheme’s fund manager. It is a well-diversified portfolio covering sectors such as financials, consumer durables, automobiles, technology and engineering. Close to 57% of the scheme’s portfolio is invested in large-sized companies while remaining is spread across mid-and small-sized companies.

Such conviction bets show desired results especially in the long term. This is reflected in the performance of the scheme in the long duration. In the past seven- and 10-year periods, the scheme has given 16.8% and 24.7%, while other schemes in this category have given 14% and 17.6%, respectively, during the same period, while its benchmark index, Nifty 500 TRI, has given 13.2% and 16.4% returns. This scheme would work for investors who believe in the power of benefiting from patient investing which pays off when bets are based on high conviction.


Portfolio change (past 6 months)

New entrants	Complete exits	Increase in allocation
Adani Ports	AU Small Finance Banks	Bluestar, Bajaj Finserv
Bharat Heavy Electricals	Agro Tech Foods	Dixon Technologies, Kotak Mahindra
	Westlife Develp	Sheela Foam, SBI, Interglobe Aviation
		Bharti Airtel, HDFC Bank

Returns (in %)

Period	CAGR return	SIP CAGR Return	Equity Focused Fund -AVG CAGR Return (%)
1 year	-6.57	-7.53	-9.18
3 year	13.19	8.58	12.04
5 year	18.72	11.86	16.25

Returns peer comparison ( in %)

Scheme	1-year	3-year	5-year
SBI Focused Equity Fund	-6.57	13.19	18.72
Mirae Asset India Equity Fund	-2.99	16.47	19.42
Principal Multi Cap Growth Fund	-10.39	15.37	17.65

Source: Accord Fintech, compiled by ETIG Database

Expert Take
KAUSTUBH BELAPURKAR,
Director (fund research), Morningstar India
The fund is a concentrated high conviction strategy investing across the capitalisation curve. R Srinivasan is an excellent stock-picker and runs a benchmark-agnostic strategy both at stock and sector levels. He focuses on investing in high growth stock and doesn’t mind paying a premium for growth. He also invests a portion of his portfolio in value plays which he believes are trading at a significant discount to their intrinsic value.