Fastrack Fidelity
Fidelity MF has hit the fast track within a short span of two years. Expect more action, as the fund has big designs on India.
By Muthukumar K, TNN |
Fidelity MF seems to have got its basics right on the equity front. Two years since the fund began its operations in India, several questions were raised as to whether it will be able to successfully implement its global investment practices in India. If one goes by the returns generated by its equity schemes in the past one and two years, it appears that Fidelity MF has succeeded in getting its initial footwork right.
While we haven’t assigned ratings to any of its funds - since we go strictly by the three-year track record - the initial performance looks encouraging. The Rs 2,891-crore Fidelity Equity fund managed to outperform its benchmark BSE 200 in the past one and two years, respectively.
As on July 20, ’07, it had given a one-year return of 72% - 17% more than the returns given by BSE 200. Over a two-year period, it gave a return of 48% p.a. - 6% more than BSE 200 returns. It ranks 20th among 161 equity diversified funds.
Unlike other diversified funds, which restrict their holdings to 30-odd stocks, Fidelity Equity holds around 75 stocks in its portfolio. The statistics are similar for its other equity funds. Fidelity’s hyper-diversification strategy is in line with its global investment practice. Also, the fund’s portfolio does not have more than 5% of a single stock. Currently, its portfolio is biased towards large-cap stocks. Around 37% of its portfolio comprises mid-cap stocks, with large-cap stocks making up the rest.
The Rs-828 crore Fidelity Tax Advantage fund, which was launched in January ’06, has also outperformed its benchmark index BSE 200. It posted a 63% one-year return - 8% more than that generated by BSE 200. Its portfolio also has a bias towards large caps -35% of the portfolio comprises mid caps, with the rest being large caps.
The fund manager usually attempts to put more into mid caps since the three-year lock-in of a tax fund gives leeway to look at long-term returns without having to worry about redemption pressures. Fidelity Tax Advantage ranks seventh among 26 tax-savings funds in the country in terms of returns.
The fund house has six analysts, with three regional analysts based in Hong Kong. Going forward, its fund managers are willing to play the capital expenditure (capex) cycle, as well as invest in companies that are expected to benefit from favourable Indian demographics. The latter gives an assured demand for various products - consumer or otherwise. Media, finance, capital goods and industries related to capex are the sectors the fund house is bullish on.
While we haven’t assigned ratings to any of its funds - since we go strictly by the three-year track record - the initial performance looks encouraging. The Rs 2,891-crore Fidelity Equity fund managed to outperform its benchmark BSE 200 in the past one and two years, respectively.
As on July 20, ’07, it had given a one-year return of 72% - 17% more than the returns given by BSE 200. Over a two-year period, it gave a return of 48% p.a. - 6% more than BSE 200 returns. It ranks 20th among 161 equity diversified funds.
Unlike other diversified funds, which restrict their holdings to 30-odd stocks, Fidelity Equity holds around 75 stocks in its portfolio. The statistics are similar for its other equity funds. Fidelity’s hyper-diversification strategy is in line with its global investment practice. Also, the fund’s portfolio does not have more than 5% of a single stock. Currently, its portfolio is biased towards large-cap stocks. Around 37% of its portfolio comprises mid-cap stocks, with large-cap stocks making up the rest.
The Rs-828 crore Fidelity Tax Advantage fund, which was launched in January ’06, has also outperformed its benchmark index BSE 200. It posted a 63% one-year return - 8% more than that generated by BSE 200. Its portfolio also has a bias towards large caps -35% of the portfolio comprises mid caps, with the rest being large caps.
The fund manager usually attempts to put more into mid caps since the three-year lock-in of a tax fund gives leeway to look at long-term returns without having to worry about redemption pressures. Fidelity Tax Advantage ranks seventh among 26 tax-savings funds in the country in terms of returns.
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Both Fidelity Equity and Fidelity Tax Advantage, which are managed by Sandeep Kothari, have done well. Fidelity India Special Situations, which is managed by Rajesh Singh, has also put up a good performance. According to the latest data, the fund has managed to beat the returns of other contra funds. It logged one-year returns of 55%, compared to SBI Magnum Contra’s 54%, UTI Contra’s 21%, DBS Chola Contra’s 32%, Tata Contra’s 23% and Kotak Contra’s 42%. The fund house has six analysts, with three regional analysts based in Hong Kong. Going forward, its fund managers are willing to play the capital expenditure (capex) cycle, as well as invest in companies that are expected to benefit from favourable Indian demographics. The latter gives an assured demand for various products - consumer or otherwise. Media, finance, capital goods and industries related to capex are the sectors the fund house is bullish on.
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