With an exposure of about 30 per cent in foreign securities, this fund diversifies its portfolio across market caps and geographies. It has still managed to beat India-focused multi-cap funds in seven out of the last eight years.
Strategy: Stocks are identified by assessing price in relation to the intrinsic value through an analysis of cash flows, earnings and asset value. Three features make the fund stand out from peers: value, bargain hunting and long-term orientation. 'In the short term, stocks may overreact to news and noise. On a long-term basis, we believe markets are efficient and patience may reward those who have identified undervalued stocks,' says the fund manager.
The domestic portfolio has generally tilted towards mid- and small-cap stocks, with large-cap allocations at 35-40 per cent. The fund's portfolio turnover is among the lowest in the category. The foreign component has dragged the returns in the last one year but has also contributed to smoother returns over the long term. An exceptionally stable fund management team has also led to the continuity of the style.
Performance: Though the fund's 41.6 per cent return doesn't shine amid a category return of 55.5 per cent in the last one year, this is due to the fund's overseas exposure, which hasn't done as well as Indian stocks in this period. The fund's 3- and 5-year returns at 20.8 and 15.6 per cent are ahead of the category, suggesting that global diversification has paid off over the long term. The track record suggests that this fund does a good job of containing downside in falling markets like in 2008 and 2011 and participates fairly well in rallies too.
What we don't like: The low turnover and stringent dividend yield orientation may prevent this fund from delivering quick results in a bull market.
Why invest? The global exposure, combined with the value and multi-cap approach, makes it a good buy for conservative, truly long-term investors.
1.ICICI Prudential Tax Plan
2.Reliance Tax Saver (ELSS) Fund
3.HDFC TaxSaver
4.DSP BlackRock Tax Saver Fund
5.Religare Tax Plan
6.Franklin India TaxShield
7.Canara Robeco Equity Tax Saver
8.IDFC Tax Advantage (ELSS) Fund
9.Axis Tax Saver Fund
10.BNP Paribas Long Term Equity Fund
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