R Srinivasan of SBI Mutual Fund lives upto reputation of ‘Rockstar Fund Manager”
In a piece written as long back as in 2012, I described R Srinivasan, the fund manager of SBI Mutual Fund, as a “rockstar fund manager”.
I conferred this prestigious title upon Srinivasan owing to his spectacular track record of churning out returns that have not only beaten the benchmarks by a wide margin but also his peers.
Srinivasan has again lived up to his reputation by getting his SBI Small and Mid Cap Direct to deliver a magnificent return of 83.1% for the year ended 31st December 2017.
This sensational news was revealed by moneybhaskar.
The performance of the mutual funds in other categories was also revealed.
It is notable that several mutual funds have effortlessly clocked a return in excess of 50%.
| Small and mid-cap fund | Return |
| SBI Small and Mid Cap Direct (G) | 83.1% |
| L & T Emerging Business Fund DP (G) | 69.6% |
| IDFC Sterling Equity Direct (G) | 66.0% |
| Large cap fund | Return |
| IDFC Equity Direct (G) | 61.5% |
| JM Core 11 Fund Direct (G) | 50.6% |
| DHFL Large Cap – DP (G) | 47.2% |
| Balanced Fund | Return |
| Principal Balanced – Direct (G) | 40.2% |
| Baroda Pioneer Balanced – Direct | 33.9% |
| Reliance ASF Balanced – Direct (G) | 33.5% |
| Diversified Equity | Return |
| HDFC Small Cap Fund Direct (G) | 64.7% |
| Sundaram Value Fund Sr I – Direct (G) | 62.3% |
| Reliance Capital Builder -II-Sr-B DP (G) | 57.9% |
| Thematic infrastructure | Return |
| L & T Infrastructure – Direct (G) | 65.0% |
| IDFC Infrastructure – Direct (G) | 63.6% |
| Reliance Diversified Power – Direct (G) | 63.7% |
| Tax Saving Fund (ELSS) | Return |
| BOI Tax Advantage – Direct (G) | 61.0% |
| IDFC Tax Advantage – Direct (G) | 56.9% |
| Principal Tax Saving – Direct | 52.3% |
| Banking and finance sector fund | Return |
| ABSL Bank & Finance Sector – DP (G) | 54.9% |
| Invesco India Banking – Dir (G) | 52.6% |
| ICICI Pru Banking & Finance Service – Direct (G) | 51.2% |
| FMCG Sector Fund | Return |
| SBI FMCG Fund – Direct (G) | 60.3% |
| ICICI Pru Fund – Direct (G) | 41.2% |
(There are only two funds in this sector.)
| Technology Sector Fund | Return |
| ABSL New Millennium – Direct (G) | 24.5% |
| ICICI Prudential Technologies – Direct (G) | 21.4% |
| Tata Digital India Fund – Direct (G) | 22.1% |
| Other sector fund | Return |
| Tata India Consumer Fund – Direct (G) | 80.8% |
| Can Robeco FORCE – Direct (G) | 47.3% |
| ABSL Manufacturing Equity – DP (G) | 44.8% |
| Index fund | Return |
| Reliance ETF Junior BeES | 48.8% |
| IDBI Nifty Junior Index – Direct (G) | 48.1% |
| ICICI Pru NN50IF – Direct (G) | 48.7% |
However, the Pharma and Healthcare Sector Funds spoilt the show by delivering sub-par returns.
| Pharma & Healthcare Sector Fund | Return |
| Reliance Pharma Fund – Direct (G) | 6.2% |
| UTI Pharma Health – Direct (G) | 5.6% |
| Reliance Pharma Fund (G) | 5.3% |
Prima facie, it appears that Pharma sector may continue to report disappointing returns owing to the Damocles sword of the USFDA inspections, warning letters and banning.
In fact, Basant Maheshwari has expressed the opinion that Pharma has seen its best days and is unlikely to repeat its past glory. It is better to look at other sectors for multibagger gains.
Take Crocin Advance ? on every downtick. On a serious note I feel Pharma has seen its best look at other sectors. https://t.co/cdDN5WOWz6
— Basant Maheshwari (@BMTheEquityDesk) November 11, 2017
Portfolio and sectoral allocation of SBI Small and Mid Cap Direct
We have to peep into the portfolio of the SBI Small and Mid Cap Direct to see what stocks R Srinivasan bought that contributed to the spectacular performance.
The top ten holdings as of 30th November 2017 are as follows:
| Equity | Sector | Value (Rs cr) |
Asset % |
| Westlife Dev | Banking/Finance | 57.53 | 6.48 |
| Relaxo Footwear | Cons NonDurable | 42.48 | 4.78 |
| Kirloskar Ind | Engineering | 41.79 | 4.71 |
| Hawkins Cooker | Cons Durable | 39.27 | 4.42 |
| Elgi Equipments | Engineering | 37.53 | 4.23 |
| Orient Refract | Cement | 37.50 | 4.22 |
| Tamil Newsprint | Manufacturing | 36.71 | 4.13 |
| Camlin Fine | Chemicals | 35.74 | 4.02 |
| Hatsun Agro | Food & Beverage | 34.75 | 3.91 |
| Techno Electric | Engineering | 33.86 | 3.81 |
The sectoral allocation is as follows:
| Industry | Ratio |
| CONSUMER GOODS | 24.82 |
| INDUSTRIAL MANUFACTURING | 14.16 |
| SERVICES | 12.25 |
| CHEMICALS | 11.99 |
| CONSTRUCTION | 6.99 |
| FINANCIAL SERVICES | 6.31 |
| TEXTILES | 4.59 |
| PAPER | 4.13 |
| AUTOMOBILE | 2.94 |
| MEDIA AND ENTERTAINMENT | 2.68 |
Click here to view full portfolio and sectoral breakdown
Model Portfolios recommended by Gurus lag behind
The spectacular performance of the mutual funds is creditable because it outperforms the gains given eminent stock wizards.
According to my calculations, the average return from the stocks recommended by the Gurus of Outlook Business was only 36% which is average.
The Gurus of CNBC TV18 fared somewhat better with an average return of 50%.
Of course, some specific stocks recommended by the gurus delivered multibagger returns of upto 200%+.
Novice investors throng mutual funds
Some novice investors are doing the sensible thing by investing their savings in mutual funds instead of coming to Dalal Street and foraging for stocks in the bushes.
The best option to get Return on Investment is investment in Mutual Funds
They give higher return over a period of time.
It is like a common pool of money where many people invests. #SantasSchoolOf5nance— Aditya Garg (@Aditya_G104) December 30, 2017
In fact, according to moneybhaskar, as of November 2017, the asset size of mutual funds has increased to Rs 22.73 lakh crore while the number of new accounts/ folios rose to 6.49 million. Out of this, the number of new accounts (folios) of equity, tax saving and balanced funds increased to 5.30 crore.
Year 2017 turned out to be the year of least volatility ; Indicating market getting matured ; second domestic inflow into mutual fund holding the market steady ; YTD return is also 27% ; Glad investors in Mutual funds are getting the benefit @abcabslmf pic.twitter.com/picUZgSY0b
— A Balasubramanian (@MFBALA) December 27, 2017
Best Mutual Funds For 2018
Now let us home in on the best mutual funds to buy for 2018.
Manoj Nagpal, an authority on mutual funds, offered valuable recommendations on the best mutual funds to buy in an interview with the charming Sumaira Abidi.
What are the top mutual funds to watch out for in 2018? @NagpalManoj shares his picks with @SumairaAbidi #MFCorner https://t.co/JJMzQTl1kr
— CNBC-TV18 (@CNBCTV18Live) December 28, 2017
In addition, three leading mutual fund experts, being Amol Joshi of PlanRupee Investor Service, Suresh Sadagopan of Ladder7 Financial Advisors and Vijai Mantri of Buckfast Financial Advisory Services have recommended the following mutual funds as offering the best bang for the buck in an article in Bloomberg Quint.
| Top Mutual Fund Picks | |
| Amol Joshi of PlanRupee Investment Services | |
| Largecap | Reliance Top 200 |
| Multicap | Motilal Oswal MOSt Focused Multicap 35 |
| Mid & smallcap | Franklin India Prima Fund |
| Balanced | ICICI Pru Balanced |
| ELSS | Aditya Birla SL Tax Relief 96 |
| Suresh Sadagopan of Ladder7 Financial Advisories | |
| Largecap | Birla SL Frontline Equity Fund |
| Multicap | Motital Oswal Most Focussed 35 Multicap Fund |
| Mid/smallcap | Mirae Asset Emerging Bluechip Fund |
| Balanced | HDFC Balanced Fund |
| ELSS | Birla SL Tax Relief 96 |
| Vijai Mantri of Buckfast Financial Advisory Services | |
| Largecap | Mirae Assets India Opp Fund |
| Multicap | Invesco Contra Fund |
| Mid/smallcap | HDFC Small Cap |
| Balanced | Principal Balance Fund |
| ELSS | IDFC |
No doubt, the selection of mutual funds by the experts is stellar and is likely to shower hefty gains upon investors in 2018 as well.
If you are not an expert,for small cap and mid cap stocks go for small and mid cap mutual funds. I also invest around 25 to 30% of my portfolio in small cap/mid cap mutual funds through Sip and directly invest in only large cap stocks. In large cap and bigger mid cap stocks most of information is in public domain, but in small cap one has to dig deep(if you are not speculating), which only a full time expert can do.In my view if any body last year could not get 40 % plus return in his small and mid cap portfolio, mutual funds are best place for them. As in good mutual funds they would have got it. No recommendation, just for discussion.
Pharma and Healthcare Mutual Funds have not done well because they have ignored many high growth great pharma stocks like Lincoln Pharma which has delivered 60% returns in just the last 3 months, 30% returns in last calendar year, 230% since 3 years and 421% since past 5 years. Not even a single Mutual fund has bought Lincoln Pharma till date despite the fact that the company is giving such good returns and showing great sales and profits every quarter and is now even starting an NBFC company like how Piramal Enterprises had started and are also close to getting USFDA approval. Lincoln Pharma stock reached Rs.250 today, 1st Jan 2018, up from Rs.145 on 11th Aug 2017 and is now well on its way to move above Rs.300 and more than that, but Pharma Mutual funds are ignoring such stocks and hence delivering poor returns.
SBI Small and Midcap from day one is a class apart. He needs to feel happy, who got stuck in the fund when it was open in the Daiwa days and later.
Have a look at my earlier post on this forum here
http://rakesh-jhunjhunwala.in/namo-zinda-hai-get-ready-for-mega-reforms-to-rural-sector-multibagger-gains-from-agri-stocks/
written just a few days back and see where the said stock has performed. Always have an open mind before investing. If everybody tells you rural stocks are good, try thinking out of the box. The said stock has a very big target as per me, though I would’nt give it.
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