Skip to main content

Fidelity Equity Fund

A classical diversified equity scheme, Fidelity Equity does not promise the moon. Its pretty stable portfolio, however, will suit those seeking modest returns from their investments

 

FIDELITY Equity, a plain vanilla equity scheme, has emerged to be a reasonable fund so far since its launch in April '05. Its pretty stable portfolio may not have generated outstanding returns, but at the same time have not disappointed the investors either. With an asset size of about Rs 2,860 crore, Fidelity Equity also stands out to be the largest equity scheme in the Fidelity basket.

PERFORMANCE:

Fidelity Equity's performance is more or less aligned to the broader market indices like the Sensex and the Nifty and its benchmark index, the BSE 200. For instance in 2005, the year of its launch, the fund returned about 44% against 46% of the Sensex, 43% of the Nifty and 39% by the BSE 200. In 2006, the fund generated 44% returns, while the Sensex, the Nifty and the BSE 200 gave about 47%, 40% and 40% returns, respectively.


   The fund's performance, however, was a bit disappointing in the most happening year 2007, when compared with the returns of many other pure diversified equity schemes. Its 55% returns may have been at par with similar returns from the Nifty but the fund grossly failed to beat its benchmark – the BSE 200 that gave returns over 60% and even the returns turned in by average of the diversified equity schemes, which was about 59% in that year.


   Despite the fact that the mid- and small-cap stocks were a rage in 2007, Fidelity Equity abstained from taking any aggressive exposure in these market segments. Similarly, sectors like real estate, which were selling like hot cakes then, were clearly out of its investment trajectory, while exposure to infrastructure and construction sectors was limited. This lack of aggressiveness did cost the fund dearly in 2007. But this strategy also acted as a cushion in the following year when the markets tanked. The market meltdown of 2008 saw the Sensex and Nifty return -52% each, while the BSE 200 was down with -57%. Fidelity Equity faired a notch better with fall in its net asset value restricted to 50%. In 2009, the fund was back to its original pace generating 85% returns against the Sensex's, the Nifty's and the BSE 200's 80%, 75% and 88% returns, respectively.

PORTFOLIO:

With over 60 stocks in its portfolio at any given point in time, this fund is fairly diversified with an average exposure of less than 5% to any single stock. The only exception is Reliance Industries, which is its biggest holding since April '07, and on an average accounts for about 7% of the fund's portfolio for over a year now. In fact, most of the fund's holdings are prominent large-cap stocks that the fund has been holding for over 2 years now. These include RIL, Bharti Airtel, ICICI Bank, BHEL, SBI, Infosys, L&T, HUL, PNB, HDFC Bank, ONGC and ITC to name a few. In a nutshell, the fund has what the broader market has and this well explains the reason for its returns being more or less aligned to the market.


   While the fund does churn the portfolio occasionally, the churn is restricted to mid- and small-cap scrips as it has been steadfast in its exposure in the Nifty and Sensex stocks. Nonetheless, the fund also needs to be credited for making some prudent and timely investments like TCS (Jun '09), Sterlite Industries (May '09), Rural Electrification Corporation (Dec '08) and LIC Housing Finance (Apr '09). Each of these scrips have returned generously since their acquisition.


   Having abstained from real estate for so long, Fidelity Equity finally took its first steps in the sector by investing in Unitech and DLF last year. However, it is the financial services and energy sectors that have continued to enjoy the fund's fancy for over two years now.

OUR VIEW:

Pure diversified equity schemes, sans bias for any market capitalisation or theme, are considered to be the most ideal of all mutual fund investments. While they may not turn out to be multi-baggers like their aggressive mid-cap or sectoral funds, their returns are, nevertheless, decent and suit many investors. Fidelity Equity belongs to this league and while it may not promise extraordinary returns, one can expect its returns to be at par with the market. As the fund stays away from taking aggressive and momentum calls, Fidelity Equity is ideal for those seeking stable and modest returns.

 


Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now