Focused Funds – Dec 2021

Before I start off on any analysis in this segment, even at the cost of a repetitive bore I will put forth this disclaimer. All fund schemes are taken as direct. However, even if you are a direct investor, hire a financial advisor that you trust who can guide with investments. Pay for your advice.

Fund category definition: Funds with maximum 30 stocks in their portfolio

Benchmark: Nifty 500 TRI with return of 2.42% in December 2021

Data as on: 31st December, 2021

Summary

I have always found focused funds very intriguing. To me, it seems like more giant versions of PMS’s per se since they also end up being concentrated less than 30 stock portfolios.

With the new primary benchmark system, like Flexi Cap, this category also seems to follow Nifty 500 TRI. Only IIFL and Kotak showed a movement slightly better than the benchmark.

There is no movement in terms of AUM size or even much of a change in expense ratios apart from 0.04% increase for DSP moving on to 1.07%. In some funds stocks have increased by 1 or 2 in number. The one thing to note is that although the category has a requirement of limiting stocks to 30, in this table the higher numbers could be due to multiple ISINs of the same stock.

Market Cap Allocation

Well, there’s been quite some market cap wise juggling in a few funds. I will limit what I see to movements more than 5%. Yup, it’s that much of a shift.

SBI which had no presence of Small Cap now sees it shoot up to little over 6% with the addition of just two stocks – WABCO and Medplus.

Mirae has cut down it’s allocations in Mid cap and Small cap, choosing to beef up Large cap by over 6%. But, save the excitement on this one, folks. Mirae’s rejuggling is more the curious case of recategorisation with their existing holdings of Mphasis and Bharat Electronics transitioning from Mid Cap to Large Cap. Although the reduction in Small Cap has also come thanks to a complete exit from Indian Energy Exchange.

Nippon sees a reduction in large cap allocation of almost 7%. This comes from a mix of exiting BPCL and Honeywell slipping from Large cap to Mid cap.

Top 5 sectors

Franklin sees quite a bit of reduction in their Pharma allocation with a complete exit from Lupin. On the other hand, they have an increased allocation in Consumer Non-Durables or FMCG reaching sector #4 with a 1.86% addition in Emami.

SBI on the other hand increased it’s allocation to Retail with a massive 3.43% addition to Medplus, a small cap stock.  

Top 10 stocks

When you look at the chart, you see that Mirae, Franklin, Nippon, IIFL, ICICI and Kotak have quite a bit of an overlap in the top 10 stocks with a lot of colour clusters at the top.

Axis has completely exited its’ position in Reliance Industries.

As for DSP, with just a 0.24% reduction Sheela Foam finds itself out of the top 10.

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