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Five equity funds have given superior 10-year SIP returns

, ET Bureau|
Last Updated: Jun 05, 2020, 02.20 PM IST

Summary We take a look at five funds across categories in which SIP returns have been 13-16 per cent over a 10-year period.

Some of the companies preferred by the fund are those who gain market share, good ROCE and backed by strong management.
Many investors who have put money into equities through Systematic Investment Plans (SIP) in the past five years and even beyond have reason to be disappointed. While 10-year SIP returns of various equity schemes have been in single digits, there are some that managed to outperform peers and the benchmark indices. ET takes a look at five funds across categories in which SIP returns have been 13-16 per cent over a 10-year period.

SBI Small Cap Fund
AUM: Rs 3,280 crore
Fund Manager: R Srinivasan
10-year SIP Return: 16.4 per cent
Top 3 holdings: Hawkins Cookers, Dixon Technologies, Elgi Equipments

Open for lumpsum investment only since March end, this fund is one of the most sought after in the small-cap space. It follows a bottom-up strategy for stock picking with a strong emphasis on management quality, return on equity and valuations. The portfolio has 45-50 stocks with the top 10 bets accounting for 37 per cent of the portfolio. It has consistently outperformed its benchmark by a decent margin over 1, 3, 5 and 10-year periods.

Canara Robeco Emerging Equities Fund
AUM: Rs 4,846 crore
Fund Manager: Miyush Gandhi, Shirdatta Bhandwaldar
10-year SIP Return: 14.82 per cent
Top 3 holdings: HDFC Bank, Reliance Industries, ICICI Bank

A fund in the large and midcap category, the proportion of the large-cap and mid-cap stocks in the portfolio is 55:45. Knowing for managing its risk well that has helped generate superior returns, the scheme avoids concentrated bets and caps exposure to mid- and small-cap stocks at 3-4 per cent in the portfolio. Some of the companies preferred by the fund are those who gain market share, good ROCE and backed by strong management.

Edelweiss Greater China Equity Offshore Fund
AUM: Rs 193 crore
Fund Manager: Bhavesh Jain, Hardik Verma
10-year SIP Return: 14.24 per cent
Top 3 holdings: Tencent, Alibaba, TSMC

A fund of funds, this scheme invests in JPMorgan Funds - Greater China Fund. It is meant for investors with a high risk appetite looking to diversify geographically to China, Hong Kong and Taiwan. Amongst sectors, the fund is overweight on IT, healthcare and consumption. The fund manager builds a high conviction portfolio investing
in 50 out of 785 stocks on MSCI golden dragon index. With China taking strong containment measures for Covid-19 as well as proactive countercyclical economic policies, fund managers are confident of a strong bounce back.

Nippon India Pharma Fund
AUM: Rs 2,851 crore
Fund Manager: Sailesh Raj Bhan
10-year SIP Return: 13.66 per cent
Top 3 holdings: Aurobindo Pharma, Dr Reddy’s, Sun Pharma

The manager of one of the best-performing sectoral funds believes that earnings, which were the biggest challenge for the last three years, are starting to improve across segments due to low base, efficiency, and currency benefits. Excessive pricing pressure is bottoming out, rise in FDA plant resolutions and product approvals are likely to lead a recovery in US business. Companies with an India focus are expected to grow at a faster rate and huge underpenetration, rising income make this sector a structural investment opportunity. Being a sector fund it is recommended for risk takers with exposure not exceeding 10 per cent of equity portfolio.

AXIS Long Term Equity Fund
AUM: Rs 19,632 crore
Fund Manager: Jinesh Gopani
10-year SIP Return: 13.37 per cent
Top 3 holdings: TCS, Avenue Supermarts, Kotak Mahindra Bank

The scheme with a largest AUM portfolio eligible for tax saving under Section 80C has a lock-in period of three years. This helps the fund manager take a longer term view and eliminates near-term pressures on stock selection. Amongst the top performers in the category, the fund manager runs a concentrated portfolio of 35-40 stocks
with the top 10 stocks accounting for 64 per cent of the portfolio. Around 75 per cent of the portfolio is made up of large-caps and the rest in mid- and smallcaps. The fund manager is overweight on financials and auto, and underweight pharma and FMCG.

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