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Tuesday, December 22, 2015

BSL MNC Fund

 

BSL MNC – Fund for all seasons

 

The moment you hear about a focused theme funds; you fear it to be subjected to excessive price fluctuation, an investment suitable only for certain economic cycles and targeted to investors with high risk appetite. While, yes these traits indeed are true to the category, but BSL MNC Fund – an offering from the BSL fund house is an exception to these traits and scores gold in all areas – a Fund for all seasons.

 

Where does the fund invest?

 

As the name suggests, portfolio of the MNC fund is loaded with pure quality MNC companies. Stocks of the companies whose products & services are used very widely and brands which are household names form part of the portfolio. The biggest advantage of MNCs is their transparency in terms of management, cash flow, balance sheet and an absence of corporate governance issues.. in short "Strong Trusted brands".

Key Highlights

-          Avoids sectors like Real Estate, Infra and PSUs which have a damaged reputation & investor confidence.

-          Higher exposure to consumption driven themes like FMCG, Pharma, consumer durable, hotels etc.

-          Some of popular names that you will instantly associate with are Maruti, Gillette, Bata shoes, Colgate, Unilever etc.

 

Maximizing upside in Bull Markets, Minimizing Downside in Bear markets… Fund for all seasons!!.

 

As investors we make a mistake chasing funds which have given superlative returns in bull market, however many leaders of bull market are many a times laggards of bear markets and thus over a complete market cycle tend to deteriorate investor wealth. Superlative performance can be delivered by many in a bull market, but minimizing the loss is a rare skill and is of utmost importance. BSL MNC fund has displayed this trait. A fund that has maximized your returns in rising markets and minimized your losses in falling markets.

 

The table below showcases the consistency of BSL MNC fund across market cycles. In all of the below shown market cycles BSL MNC fund has managed to keep itself away from being a laggard, whereas benchmark indices and thematic indices have atleast once been a laggard.

 

Fund/ Index

Bull Phase

Sub-Prime Crises

Post Sub-Prime Crisis

Market Consolidation

Positive sentiment driven rally

Apr-03 to Mar-08

Apr-08 to Mar-09

Apr-09 to Mar-11

Apr-11 to Mar-14

Apr-14 to Mar-15

BSL MNC Fund

35.1

-27.8

54.0

14.6

87.6

CNX Nifty

37.1

-36.2

39.0

4.7

26.5

CNX Midcap

47.5

-45.4

53.6

2.3

51.0

S&P BSE BANKEX

41.3

-41.8

72.1

3.1

43.2

S&P BSE IT

22.0

-35.6

69.3

10.3

29.8

Source: Morningstar Direct

 

 

Low Risk, High Return – Now does that not defy the core investment theory?

 

As we are taught by academicians; if you want high returns, you need to take extra risk. However past records of BSL MNC fund, that to over a sizeable history, has defied this theory.  Over a 5 year and 10 year period, BSL MNC Fund rewards its investors with superlative returns (CAGR returns), at the same time, the fund has been subjected to least amount of volatility (measured by standard deviation).

 

Fund/ Index

Standard Deviation

(5 Year)

CAGR (%)

(5 Year)

Standard Deviation

(10 Year)

CAGR (%)

(10 Year)

BSL MNC Fund

16.94

25.98

21.13

23.01

CNX Nifty

17.25

10.64

24.76

14.98

CNX Midcap

20.61

11.19

29.25

15.73

S&P BSE BANKEX

28.32

15.08

35.45

18.92

S&P BSE IT

23.00

16.09

26.27

14.79

Returns as on May 2015, Source: Morningstar Direct

 

 

 

A fund which has never given negative returns over a 5 year period..  That too with minimum return equivalent to any fixed return investment

 

Key performance highlights

BSL MNC Fund

CNX Midcap

CNX MNC

CNX Nifty Index

Return on an average made if you would have made investment on any random day during tenure of the fund

22.00%

21.30%

14.90%

16.30%

% times investment has fetched positive return

100.00%

98.40%

98.70%

98.10%

Maximum Return

40.56%

57.49%

31.68%

44.49%

Minimum Return

7.41%

-2.08%

-3.63%

-1.16%

% times investment has fetched more than 10% CAGR returns

95.40%

75.40%

70.10%

67.60%

% times investment has fetched more than 20% CAGR returns

55.80%

45.30%

28.40%

33.60%

Returns as on May 2015, Source: MFI

 

 

 

BSL MNC Fund Report card – An All-rounder

 

Parameter

BSL MNC Fund

Thematic/ Sector Fund

Large Cap fund

Small-Midcap Fund

Diversified Portfolio

Ability to Limit losses in Bear market

Maximizing wealth in bull market

Minimal price fluctuation

Fit for all economic cycles

Note: The above report card is a relative comparison. A cross against a particular category does not mean that fund in respective category does not provide the feature on standalone basis.

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