NFO analysis: Canara Robeco Focused Equity Fund
Canara Robeco Mutual Fund launched Canara Robeco Focused Equity Fund on Friday. This open-ended equity scheme seeks to invest in equity and related instruments across market capitalisation. Moreover, being a focussed fund, it would invest in up to a maximum of 30 companies. Therefore, we can call it a focussed flexi-cap fund rather than just a focussed fund. In a press release, the company said, “The key differentiator will be sizing investment bets to create larger alpha over the medium term, through focussed company selection.”
Canara Robeco Focused Equity Fund is open for subscription up to May 7, 2021. It will again re-open for subscription on May 18, 2021.
Click here to access its scheme information document.
Objective
The investment objective of the scheme is to generate long-term capital appreciation by investing in equity and related instruments across the market capitalisation of up to 30 companies.
Asset allocation
|
Instruments
|
Indicative allocations
(per cent of net assets)
|
Risk Profile
|
|
Minimum
|
Maximum
|
High/Medium/
Low
|
|
Equity and Equity-related Instruments*
|
65
|
100
|
Medium to High
|
|
Debt and Money Market Instruments
|
0
|
35
|
Low to Medium
|
|
Units issued by REITs and InvITs
|
0
|
10
|
Medium to High
|
|
Units of MF schemes
|
0
|
5
|
Medium to High
|
|
Equity Exchange Traded Funds
|
0
|
10
|
Medium to High
|
|
* Subject to an overall limit of 30 stocks.
|
The above asset allocation shows that at all times, it will not invest less than 65 per cent in equity. Further, it can also invest in units of mutual fund schemes and equity ETFs up to 5 per cent and 10 per cent, respectively.
Benchmark
The scheme is benchmarked against S&P BSE 500 Total Returns Index (TRI). S&P BSE 500 TRI is a logical benchmark as it comprises large-cap, mid-cap, and small-cap stocks. However, the more real benchmark for this fund would be its peers.
Investment strategy
This scheme will be having a concentrated portfolio of not more than 30 stocks. However, the scheme would invest its assets across market capitalisation.
The scheme is said to follow an active investment style and invest in companies having a strong competitive position, the ability to increase the market share, a good financial track record along with quality management.
The scheme while making investment decisions, besides other factors will also consider the impact of the prevailing economic environment over the medium to long-term prospects of the companies.
Fund manager
This scheme will be managed solely by Shridatta Bhandwaldar. Shridatta has over 15 years of experience. Below are the details and performances of other funds managed or co-managed by the fund manager.
|
Funds
|
Trailing returns (per cent)
|
|
1-year
|
3-year
|
5-year
|
|
Canara Robeco Bluechip Equity Fund
|
47.84
|
14.39
|
15.37
|
|
Canara Robeco Consumer Trends Fund
|
46.95
|
13.59
|
17.30
|
|
Canara Robeco Emerging Equities Fund
|
55.86
|
10.26
|
16.47
|
|
Canara Robeco Equity Tax Saver Fund
|
55.21
|
15.17
|
15.82
|
|
Canara Robeco Flexi Cap Fund
|
48.25
|
13.19
|
15.42
|
|
Canara Robeco Infrastructure Fund
|
52.22
|
3.73
|
8.93
|
|
Canara Robeco Small Cap Fund
|
87.12
|
-
|
-
|
Our take
When it comes to investing, we believe that investors should first get their risk profile assessed. This will help you to understand your risk appetite and in turn, help you pick the right investments. Focussed funds are usually a bit risky compared to a well-diversified fund. This is because a concentrated portfolio might have a higher allocation towards a single company or a single sector. Therefore, if you are a moderate to aggressive investor, then only consider investing in them. When it comes to Canara Robeco Focused Equity Fund, the fund manager is quite capable of managing downside risk without taking cash calls. Shridatta Bhandwaldar manages some of the best funds of Canara Robeco. Therefore, the captain of the ship is professional, knowledgeable, and experienced. However, commenting on the performance wouldn’t be possible as the actual portfolio is not out yet. Having said that, it would be quite interesting to see how its portfolio looks or performs.