Which Fund To Buy guide
Which Fund to Buy guide
Publication Date : 23 December, 2016Validity : Till June 30, 2017Data Source : ACE MFV2 Accord
Fintech Pvt. Ltd.
Bharosa Club is a Registered Investment Advisor with SEBI (RIA # INA100004657).
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Edition : 3 (part 2 of 2)
Disclaimer:1. Mutual Fund Investments are subject to market risks, read all
scheme related documents carefully.2. Past performance does not guarantee future returns.
HOW WE PICKED OUR FUNDS
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Our advice is free of bias, as we don’t gain from recommending one fund over another. In the interest of complete transparency, we openly
share our fund selection process.
No fund house can pay to get a fund picked in our guide
Inputs from all are welcome for continuous improvement of our selection process
We encourage members to customize their portfolios using their own research or research
from other sources
Picks from our previous guides will be picked again, if they’re in the Top 10 in their category and don’t
significantly underperform the higher ranked funds
EQUITY & TAX SAVER PICKS - FRAMEWORK
25Mutual
Fund Houses
Equity FundsTax Saver Funds
In existence for > 1 year
Corpus > Rs. 1,000 cr
Weighted SIP Performance
Top Picks
We recommend investments in Diversified Equity Mutual Funds. We don’t like thematicor sectoral funds because their performance tends to be cyclical. We also don’t like hybridfunds; instead we recommend allocation to debt funds to create an ideal asset allocation.
We like funds with a track record of at least 1 year. That allows meaningful analysis ofperformance.
Funds with a large corpus implies a certain amount of investor confidence. It also allowsa fund manager to adequately diversify his holdings.
We looked at the SIP performance of the shortlisted funds over a 3 year period. Furtherwe assigned weights to different time periods - 10% (6 months), 20% (1 year), 30% (2years), 40% (3 years). This creates a bias for funds which have delivered good returnsover a sustained period of time, and at the same time those which are showing aturnaround.
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Stages of filtration Criteria Used
EQUITY – Large Cap
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Schemes 66
In existence for > 1 year 66
Corpus > Rs. 1000 cr 26
ICICI Pru Top 100 Fund (G)
Birla SL Advantage Fund (G)
HDFC Top 200 Fund (G)
Reliance Growth Fund (G)
DSPBR Equity Fund (G)
ICICI Pru Focused BlueChip Equity Fund(G)
SBI BlueChip Fund-Reg(G)
Franklin India Prima Plus Fund(G)
Birla SL Top 100 Fund(G)
Birla SL Frontline Equity Fund(G)
Top 10 Rank in Weighted SIP performance
PICKED: Top 5
DROPPED: Relatively large gap in performance vis-à-vis top performing funds
EQUITY – Multi Cap
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Schemes 73
In existence for > 1 year 62
Corpus > Rs. 1000 cr 20
Top 10 Rank in Weighted SIP performance
L&T India Value Fund(G)
Birla SL Equity Fund(G)
DSPBR Opportunities Fund-(G)
ICICI Pru Dynamic Plan(G)
Motilal Oswal MOSt Focused Multicap 35 Fund-(G)
ICICI Pru Multicap Fund(G)
Kotak Select Focus Fund(G)
Franklin India High Growth Cos Fund(G)
SBI Magnum Multicap Fund-(G)
Mirae Asset India Opportunities Fund-(G)
PICKED: Top 2
PICKED: Previous pick. Relatively small gap in performance vis-à-vis #3 & #4
EQUITY – Mid Cap
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Schemes 42
In existence for > 1 year 42
Corpus > Rs. 1000 cr 20
Top 10 Rank in Weighted SIP performance
Mirae Asset Emerging BlueChip-(G)
HDFC Mid-Cap Opportunities Fund(G)
DSPBR Small & Mid Cap Fund-(G)
Sundaram Select Midcap(G)
Kotak Emerging Equity Scheme(G)
Birla SL Midcap Fund(G)
Canara Rob Emerg Equities Fund-(G)
SBI Magnum MidCap Fund-(G)
ICICI Pru Midcap Fund(G)
Franklin India Prima Fund(G)
PICKED: #2,#3,#4
DROPPED. Relatively large gap in performance vis-à-vis top performing funds
NOT PICKED: Mirae funds not available on Bharosa platform
EQUITY – Small Cap
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Schemes 5
In existence for > 1 year 5
Corpus > Rs. 1000 cr 3
Top 10 Rank in Weighted SIP performance
DSPBR Micro-Cap Fund-(G)
Reliance Small Cap Fund(G)
Franklin India Smaller Cos Fund(G)
PICKED: Top 2
EQUITY – Tax Saver
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Schemes 44
In existence for > 1 year 42
Corpus > Rs. 1000 cr 11
Top 10 Rank in Weighted SIP performance
DSPBR Tax Saver Fund-(G)
HDFC TaxSaver(G)
HDFC Long Term Adv Fund(G)
L&T Tax Advt Fund-(G)
Reliance Tax Saver Fund(G)
Sundaram Tax Saver(G)
ICICI Pru LT Equity Fund (G)
Franklin India Taxshield(G)
Birla SL Tax Relief '96(G)
SBI Magnum TaxGain'93-(G)
PICKED: Top 3
DROPPED. Relatively large gap in performance vis-à-vis top performing funds
DEBT - Framework
Ultra Short Term & Liquid FundsShort Term Debt Funds
In existence for > 1 year
Corpus > Rs. 5,000 cr
WeightedPerformance
Top Picks
For shorter duration, we recommend investments in Ultra Short Term & Liquid Funds asthey have lesser sensitivity to interest rate fluctuations. As a result, returns are morepredictable. For a 2-3 year horizon we recommend Short Term Debt Funds
We like funds with a track record of at least 1 year. That allows meaningful analysis ofperformance.
Funds with a large corpus implies a certain amount of investor confidence. It also allowsa fund manager to adequately diversify his holdings.
We looked at the performance of the shortlisted funds over a 3 year period. Further weassigned weights to different time periods - 10% (6 months), 20% (1 year), 30% (2years), 40% (3 years). This creates a bias for funds which have delivered good returnsover a sustained period of time, and at the same time those which are showing aturnaround.
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Stages of filtration Criteria Used
25Mutual
Fund Houses
In Ultra Short Term Debt, we look at Funds which are Moderately Low or Low risk
DEBT – Ultra Short Term
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Schemes 100
In existence for > 1 year 99
Corpus > Rs. 5000 cr 32
Top 10 Rank in Weighted performance
ICICI Pru Ultra Short Term Plan(G)
Birla SL Savings Fund(G)
ICICI Pru Flexible Income Plan(G)
Reliance Medium Term(G)
IDFC Ultra Short Term Fund-(G)
ICICI Pru Savings Fund(G)
SBI Treasury Advantage Fund-(G)
Reliance Money Manager Fund(G)
SBI Ultra Short Term Debt Fund(G)
Kotak Treasury Advantage Fund(G)
NOT PICKED: Modified duration of over 1 year, makes scheme susceptible to volatility
PICKED: #2
PICKED: previous pick
PICKED: previous pick, instant redemption available
DROPPED: Relatively large gap in performance vis-à-vis top performing funds
DEBT – Short Term
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Schemes 48
In existence for > 1 year 47
Corpus > Rs. 5000 cr 15
Top 10 Rank in Weighted performance
Birla SL Dynamic Bond Fund-Ret(G)
Birla SL Treasury Optimizer Plan(G)
Birla SL ST Opportunities Fund(G)
ICICI Pru Short Term Plan(G)
Birla SL Short Term Fund(G)
UTI ST Income Fund(G)
Reliance STF(G)
SBI Short Term Debt Fund(G)
Axis Short Term Fund(G)
HDFC Short Term Opportunities Fund(G)
PICKED: #2, #3, #4, #5
NOT PICKED: Dynamic Bond funds tend to be very volatile, hence we don’t recommend them
ARBITRAGE - Framework
Arbitrage Fund Universe
In existence for > 1 year
Corpus > Rs. 1,000 cr
WeightedPerformance
Top Picks
We recommend investments in Ultra Short Term & Liquid Funds as they have lessersensitivity to interest rate fluctuations. As a result, returns are more predictable. Longerduration debt funds tend to be more volatile to interest rate changes.
We like funds with a track record of at least 1 year. That allows meaningful analysis ofperformance.
Funds with a large corpus implies a certain amount of investor confidence. It also allowsa fund manager to adequately diversify his holdings.
We looked at the performance of the shortlisted funds over a 3 year period. Further weassigned weights to different time periods - 30% (6 months), 40% (1 year), 20% (2years), 10% (3 years). As arbitrage funds are typically help for short durations, the biaswas for the near term results.
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Stages of filtration Criteria Used
25Mutual
Fund Houses
Arbitrage
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Schemes 19
In existence for > 1 year 18
Corpus > Rs. 1000 cr 8
Top 10 Rank in Weighted performance
JM Arbitrage Adv Fund(G)
ICICI Pru Equity-Arbitrage Fund(G)
HDFC Arbitrage-WP(G)
Kotak Equity Arbitrage Scheme(G)
Reliance Arbitrage Advantage Fund(G)
Birla SL Enhanced Arbitrage Fund(G)
UTI SPrEAD(G)
IDFC Arbitrage Fund(G)
PICKED: #2, #3
NOT PICKED: JM Funds not available on Bharosa platform
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