Skip to main content

Mutual Fund Review: Fidelity India Growth

 

 

Accomplishment over different market cycles is this fund's strong point

This one made its mark in a relatively short period of time. Launched in 2007, it bagged a 5-star rating in the very first month of being rated.

 

However, upfront there is a question to be addressed: What sets this fund apart from Fidelity Equity, another fund in the category from the Fidelity stable also managed by Kothari? Fidelity India Growth Fund is more biased towards growth stocks and the fund manager is more willing to take concentrated bets here. To add to it, it also has the flexibility to invest in international markets.

 

True to Kothari's style, this fund adopts a buy-and-hold strategy and of the total 48 stocks currently in the portfolio, 34 have been held since inception. Over 80 per cent of the portfolio is currently in large-cap stocks. Like Fidelity Equity, Banking has been the preferred sector with an average exposure of 25 per cent since launch.

 

In 2008, the fund utilised the attractive valuation opportunity in the bear market by investing in under-valued stocks. Its cash position did go above 10 per cent for three months between May and July in 2008. By the time the rally began in 2009, the fund was fully invested which gave it a headstart. That year, it delivered 91 per cent and was the best performing fund in the category in 2010.

 

During the last two years, Banking, Pharma and IT were the biggest contributors to the fund's gains. "The out performance is the outcome of following Fidelity's investment philosophy of bottom-up stock picking, to deliver superior risk adjusted returns to our investors," says Kothari. But in the same period Telecom and Steel negatively impacted the overall gain.

 

Our View


Its performance in difference market phases is impressive. The fund takes concentrated bets when the fund manager has a high degree of conviction (RIL, ICICI Bank, Infosys Technologies). Active cash calls at certain times, with the focus on fundamentals and ability to identify stocks and managements which can execute well at the right value, has made it a star performer.

 

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...

Guide to pension plans in the form of Insurance

  Pension plans ensure that you are financially secure during your golden years. Take a look at the important aspects that you must keep in mind while opting for one...      Gone are the days when a leading criterion for choosing an employer was the type of pension plan that came with your salary package. Today, more important issues like matching of skill sets to job requirements, scope for personal and financial growth, etc. have come to the forefront. However, this has left individuals with the responsibility of financially planning for their golden years. And it's all for the best as there are a variety of pension plans available in the market to suit different individuals and their specific needs. WHAT ARE PENSION PLANS?     In a pension plan, you are required to pay premiums for a certain number of years and once you reach the retirement age, the insurer returns a lump sum amount that can be then used to purchase an annuity or stream of income for the rest of your life....

More on Mutual Funds

What Is a Mutual Fund ? A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investable surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objectives. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.   What Are The Types of Mutual Fund Scheme...

Refinancing Home Loans

With home loan lending rates easing out, many borrowers are considering home refinance as an option to minimise their liability    Home loan borrowers have always been concerned about their financial outflow while repaying debts. With interest rates easing out in the recent past, many borrowers are considering home refinance as an option to reduce this burden. So what is home refinance and how can you capitalise from it? Understanding refinancing.     Refinancing in simple terms means replacing your existing loan, with a new one, under fresh terms and conditions. So when you talk of home loan refinance, you will be repaying your existing home loan before its final tenure, with a new loan possessing different terms.    A home refinance option could prove to be beneficial for many borrowers. However, it is important to understand its procedure and the various costs that are associated with it before considering the option.    Whether it's for personal requirements or chang...

Tax Planning: Income tax and Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:   Provident Fund (PF) & Voluntary Provident Fund (VPF) Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund (PPF) An account can be opened wi...
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