Fund Review: BNP Paribas Equity Fund

As Indian economy gets into recovery mode, it makes sense to be invested in large-size companies. They will be the key beneficiaries in terms of superior earnings growth given their market share, brand recall and deep-pockets. So, it is prudent to be invested in schemes which have high large cap bias.

For conservative investors, BNP Paribas Equity is a good option with a five-year investment horizon through SIP route. The scheme is neither excessively aggressive nor too conservative. There are two factors which worked in favour of the scheme. First, the tendency of the fund manager Shreyash Devalkar to look for offbeat ideas that serve as proxy play for a theme.

For instance, to cash in on the wave of ecommerce, he bought telcos such as Bharti Airtel and Idea Cellular. Second, the fund manager’s ability to deliver consistent returns. It has beaten its category and benchmark index. In the past three-year and five-year periods, the scheme has given 20.4 % and 13.1% returns, while its benchmark Nifty 50 has given 12.3% and 5.8% returns in the same periods. The scheme has also beaten its category by a fair margin.

A fact which needs to be noted is unlike its peers, the scheme has less exposure to cyclicals. As economy recovers, the scheme might lose out on the benefits of earnings growth recovery of businesses of cyclicals.