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Fund Managers' Top Picks in Large and Multi cap Funds
October 9, 2015

An analysis of the top stocks commonly held between Large and Multi cap funds.


Author : iFAST Research



 Top Picks

Diversification of a portfolio has proven to be the smartest way of reducing the risk factor in a fund. Mutual funds do a good job of this by investing their corpus into a large number of securities depending on the scheme’s investment strategy. However, on performing a quick analysis on stocks held by all large cap and multi cap funds in the industry over a year, we found the results to be quite thought provoking.

Our sample consisted of 70 large cap and 51 multi cap funds based on the classification as per NAV India. The time period for the analysis is September 2014 to August 2015. Initially, we checked for stocks held in both the categories for the entire 12 months of analysis. Further, we went onto identify the number of funds holding these stocks over the  last 1 year  so as to find out the most popular picks.

Table 1: Top 10 most widely held stocks in Large Cap and Multi Cap Categories over a 12 month period.

Large Cap category

Multi Cap category

Stock

No. of Funds

Stock

No. of Funds

HDFC Bank Ltd

59

HDFC Bank Ltd

43

Larsen & Toubro Ltd

55

ICICI Bank Ltd

43

ICICI Bank Ltd

50

Maruti Suzuki India Ltd

36

Infosys Ltd

51

Infosys Ltd

37

Axis Bank Ltd

47

Axis Bank Ltd

32

Maruti Suzuki India Ltd

48

Larsen & Toubro Ltd

33

State Bank of India

44

State Bank of India

29

Reliance Industries Ltd

37

Tech Mahindra Ltd

14

Tata Consultancy Services Ltd

38

HCL Technologies Ltd

26

HDFC Ltd

35

Tata Consultancy Services Ltd

23

 

Interestingly, it can be seen that 8 out of the top 10 widely held stocks were common between the large and multi cap funds.

Below is a chart showing how these stocks have performed over the last 3 and 5 years.

s 

 

Table 2: Estimated earnings and Forward PE of the most commonly held stocks in large and multi cap portfolios

Stock

Estimated EPS

Estimated P/E

Mar-16

Mar-17

Mar-16

Mar-17

Axis Bank Ltd

36.72

44.77

13.33

11.24

HDFC Bank Ltd

50.91

61.65

21.25

17.36

ICICI Bank Ltd

26.37

25.68

10.55

9.24

Infosys Ltd

58.20

66.72

19.36

16.89

Larsen & Toubro Ltd

57.52

72.05

26.63

20.40

Maruti Suzuki India Ltd

169.94

230.16

25.56

19.90

State Bank of India

26.66

26.84

9.14

7.71

Tata Consultancy Services Ltd

123.25

139.65

21.30

18.80

Source: Bloomberg

Mutual Funds Exposure into the 8 stocks

Table 3 & 4: Large and Multi Cap Funds having a maximum holding in the 8 stocks over the last 1 year

Company Name

Large Cap Funds

Scheme Name

Avg Holding

(Sept 2014-Aug  2015)

Axis Bank Ltd

Religare Invesco AGILE Fund *

9.22

LIC NOMURA MF Growth Fund

7.74

DSP BR Top 100 Equity Fund

7.01

HDFC Bank Ltd

Religare Invesco Business Leaders Fund

9.33

SBI Magnum Equity Fund

8.95

ICICI Prudential Select Large Cap Fund

8.77

ICICI Bank Ltd

Templeton India Growth Fund 

9.43

JM Core 11 Fund

9.09

HDFC Large Cap Fund

8.31

Infosys Ltd

Templeton India Growth Fund 

9.06

Reliance Vision Fund 

8.79

Reliance Quant Plus Fund

8.63

Larsen & Toubro Ltd

JM Core 11 Fund

9.10

Reliance Quant Plus Fund

7.46

HDFC Equity Fund 

6.63

Maruti Suzuki India Ltd

Religare Invesco AGILE Fund *

9.35

Motilal Oswal MoSt Focused 25 Fund

6.82

Religare Invesco Business Leaders Fund

6.78

State Bank of India

HDFC Equity Fund 

8.93

HDFC Large Cap Fund

8.63

HDFC Top 200 Fund

7.86

Tata Consultancy Services Ltd

Religare Invesco Business Leaders Fund

7.86

Reliance Quant Plus Fund

5.15

DWS Alpha Equity Fund

5.11


*Religare Invesco AGILE Fund has been merged with Religare Invesco Growth Fund (effective Sept 24, 2015)

 

Company Name

Multi cap Funds

Scheme Name

Avg Holding

(Sept 2014-Aug  2015)

Axis Bank Ltd

HSBC India Opportunities Fund (G)

5.52

Franklin India High Growth Companies Fund (G)

5.51

HSBC Dynamic Fund (G)

4.99

HDFC Bank Ltd

Religare Invesco Growth Fund (G)

9.04

ICICI Prudential Multicap Fund - (G)

9.04

Religare Invesco Dynamic Equity Fund (G)

8.71

ICICI Bank Ltd

Mirae Asset India-China Consumption Fund (G)

6.78

Franklin India Opportunities Fund - (G)

6.74

HSBC Dividend Yield Equity Fund (G)

6.28

Infosys Ltd

HSBC Dividend Yield Equity Fund (G)

7.66

AXIS Equity Fund (G)

6.58

UTI-Opportunities Fund (G)

6.52

Larsen & Toubro Ltd

JM Multi Strategy Fund (G)

6.74

JM Basic Fund (G)

6.54

AXIS Equity Fund (G)

5.80

Maruti Suzuki India Ltd

Religare Invesco Dynamic Equity Fund (G)

7.09

Birla Sun Life Special Situations Fund (G)

6.52

Franklin India High Growth Companies Fund (G)

5.14

State Bank of India

HDFC Premier Multi-Cap Fund (G)

8.52

HDFC Core & Satellite Fund (G)

7.36

Motilal Oswal Most Focused Multicap 35 Fund (G)

6.02

Tata Consultancy Services Ltd

Religare Invesco Growth Fund (G)

6.27

Religare Invesco Dynamic Equity Fund (G)

5.30

Motilal Oswal Most Focused Multicap 35 Fund (G)

5.27

 

The widely held stocks in large cap and multi cap categories clearly indicate that these have become the favourite picks of a majority of fund managers. The performance of these top stocks becomes crucial for the fund’s performance over the course of the next few months.


Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website.



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