ET Wealth Sep2nd PDF

S P E C I A L I S S U E Small
THE ECONOMIC TIMES measures,

big impact
P14
www.etwealth.co | Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune | September 2-8, 2019 | 28 pages | `8
BEST
FUND
MANAGERS
2019 The fund managers who
created the most wealth
for investors. P2
cover story
The Economic Times Wealth September 2-8, 2019 ET WEALTH-MORNINGSTAR FUND MANAGER RANKING
02
ET WEALTH MORNINGSTAR RANKING OF
BEST FUND
MANAGERS
PHOTOS: GETTTY IMAGES, BHARAT CHANDA AND NITIN SONAWANE
2019
Fund managers who created the
most wealth for investors.
By Sanket Dhanorkar an easy task, given the tough market condi- Our ranking is not based on percep- Neelesh Surana of Mirae Asset Mutual
tions and unprecedented developments on tions or surveys but relies solely on hard Fund dominates the fund manager rank-
W
ith the economy slowing the domestic and global fronts in recent data. It’s an objective study that digs deep ings this year as well. This astute stock
down, the professionals years. Even so, a few fund managers have into the five-year track record of equity picker has continued his emphasis on be-
who manage your money managed to deliver healthy returns while schemes and sorts them on the basis of risk- ing in the right pockets through company-
have had to burn the mid- keeping risk at bay. ET Wealth teamed up adjusted returns. We segregated the fund specific research rather than playing on
night oil for longer. Equity with Morningstar India to identify the managers into three broad buckets and sector rotation. “There are many opportu-
fund managers have been toiling hard, best equity fund managers who created the identified the top achievers within each nities in businesses where the long-term
steering portfolios to safety. It has not been most wealth for investors. segment (see methodology on page 13). prospects are intact, although the near-
term could be impaired,” he asserts.
There is a common thread running
The top wealth creators of 2019 through the investing approach of these
top fund managers—the emphasis on
downside protection. Given the climate of
uncertainty, these fund managers would
Large cap Multi cap Small and mid cap rather err on the side of caution than make
costly mistakes. Instead of going on a hunt
for the next multi-bagger, many of them
NEELESH SURANA NEELESH SURANA
1 Mirae Asset Global 1 Mirae Asset Global 1 SHREYASH DEVALKAR
Axis Mutual Fund
prefer to minimise errors. “What you don’t
buy during such times adds significantly
Investments Investments to fund outperformance in the long run,”
points out Sohini Andani of SBI Mutual
Fund. She prefers businesses that show su-
2 SOHINI ANDANI
SBI Mutual Fund
2 JINESH GOPANI
Axis Mutual Fund
2 R. SRINIVASAN
SBI Mutual Fund
perior execution in a rough environment.
The list also has many early movers.
Harsha Upadhyaya of Kotak Mutual Fund
and Rajeev Thakkar of PPFAS Mutual
HARSHA UPADHYAYA PANKAJ TIBREWAL Fund, are among a few who pared exposure
3 SHREYASH DEVALKAR
Axis Mutual Fund
3 Kotak Mahindra 3 Kotak Mahindra
to the consumption and mid-cap segments
well before the rest of the market.
Mutual Fund Mutual fund
Fund managers have also taken diver-
gent paths. Some like Pankaj Tibrewal
R. JANKIRAMAN of Kotak Mutual Fund moved towards
4 SAILESH RAJ BHAN
Reliance Mutual Fund
4 RAJEEV THAKKAR
Parag Parikh Mutual Fund
4 Franklin Templeton healthy diversification to mitigate risks
Mutual Fund while others like Shreyas Devalkar of Axis
Mutual Fund made the portfolio more com-
pact, preferring to back conviction ideas.
HARISH KRISHNAN
5 Kotak Mahindra 5 DHIMANT SHAH
Principal Mutual Fund
5 S.N. LAHIRI
L&T Mutual Fund
Read on to know how else the best invest-
ing brains in the country have negotiated
Mutual Fund the tides of the market.
ET WEALTH-MORNINGSTAR FUND MANAGER RANKING
cover story
The Economic Times Wealth September 2-8, 2019
03
LARGE-CAP FUNDS
How new
Neelesh Surana rules have
AGE: 50 YEARS impacted
EDUCATION
B.E.(Mechanical), MBA (Finance)
the fund
EXPERIENCE
24 years
managers
RECATEGORISATION
D MAN BY SEBI has made fund
UN mandates distinct and
AG
BEST F
1
given more clarity to
ERS
investors. But fund

managers have had to
grapple with myriad
2019 issues. For large-cap
funds, the strict thresh-
old of 80% investment
in top 100 stocks by
market cap has not left
much room for maneu-
ovrability. Earlier, some
fund managers could
stray into mid-cap ter-
ritory to create alpha.
Fund managers still
hope to beat the index
by deviating from the
index and cherry pick-
ing within this universe.
Only time will tell if
they can deliver alpha
PROFILE within the confines of a
narrow universe.
fter a decade marked with any alteration in Surana’s ap-
A consistent outperformance,
the multi-cap oriented
Mirae Asset India Equity helmed
proach. Continuing his unwaver-
ing focus on stock selection, he
has avoided two extremes—ex-
Fund managers in
the mid- and small-cap
categories have faced
by Neelesh Surana altered its cellent businesses priced exorbi- different problems.
positioning last year. Amid the tantly and firms exhibiting issues Initially, some fund
re-categorisation, the fund house with their business model. Amid managers found it chal-
felt that aligning with the large- heavy market polarisation, he large drawdowns during any lenging to realign their
cap mandate would improve scal- skillfully targeted businesses wit- market downturn, keeping the portfolios to meet the
ability and liquidity of a scheme nessing near-term impairment portfolio well diversified. This ap- revised norms. As fund
absorbing heavy inflows. Being in earnings but whose long-term proach is reflected in the superior managers rushed to
large-cap biased anyway, this earnings trajectory was intact. risk-adjusted return delivered by Mirae Asset plug gaps in the large-
change in mandate didn’t require He has put emphasis on limiting the fund. Global cap presence, demand
Investments shifted away from mid-
and small-cap stocks to-
impaired. tion oriented businesses. Long- wards frontline stocks.
QUICK TAKE term growth drivers related to
5-year asset
Many mid- and small-
Promising theme for the favourable demographics, rising weighted return cap stocks which didn’t
next 3-5 years income levels and urbanisation, meet the revised norms
What the market tells me
We are coming out of a period
We are positive on the consump- etc. are intact. 14.40% (even within the mid-
and small-cap universe)
of sub-par earnings growth, as had to be sold. Besides,
reflected by the low profit to GDP TOP SECTOR BETS TOP STOCK PICKS Average 5-year AUM
investor confidence in
ratio compared to the historical mid-cap space was also
average. We expect corporate
profitability to improve over the
Financial Services 36.68% HDFC Bank Ltd 8.95% `4,418 dwindling around this
time. As a consequence,
next two years. Post the recent Technology 10.12% ICICI Bank Ltd 6.25% CRORE liquidity dried up quick-
ly in this basket, leav-
correction, there are good long-
term investment opportunities ing fund managers in
across sectors. Consumer Cyclical 9% Reliance Industries 5.50% Risk adjusted returns the mid- and small-cap
segment high and dry.
My portfolio is aligned for
Our approach continues to focus
FUND MANAGED ANNUALISED
RETURNS (%)
0.64 Faced with a dearth in
liquidity, fund manag-
on businesses which could grow ers found it difficult to
earnings despite the ongoing take positions within
FUND NAME AUM (`CR) 3-YEAR 5-YEAR
challenges. In the current envi- this universe. They
ronment, there are many oppor- were gradually able to
tunities in businesses where the Mirae Asset Large Cap 13,492 11.20 13.04 align their portfolios
long-term prospects are intact, over a few months.
although the near-term could be Asset weighted returns as on 30 June; Annualised returns, AUM and sector data as on 31 July Source: Morningstar India
cover story
04
UN
D MAN PROFILE TOP SECTOR BETS TOP STOCK PICKS
AG
BEST F
2 B
eing underweight on
ERS
Financial services 37.47% HDFC Bank Ltd 8.93%

soaring index heavy-
2019 weights has hurt SBI
Bluechip in the near term,
Industrials 10.71% ICICI Bank Ltd 5.91%
yet Sohini Andani has
not veered from her core Consumer defensive 9.14% Larsen & Toubro 5.18%
philosophy. She insists
that what you don’t buy
during such times helps FUND MANAGED ANNUALISED
RETURNS (%)
create alpha in the long
run. Andani has shown
preference for businesses FUND NAME AUM (`CR) 3-YEAR 5-YEAR
that are showing superior
execution in a rough envi- SBI Bluechip 21,585 6.39 10.75
ronment. She maintains
that the market scenario
has been changing pace has driven growth in the past few
furiously in recent years
and reckons the pain in
QUICK TAKE years, we believe it cannot sus-
tain on its own unless supported
the financial sector has by a revival in investments
made things worse than What the market tells me and employment growth. If the
what was earlier expected. Currently, the market seems to be growth does not revive, the con-
Sohini On her part, she admits
lagging behind in estimat-
worried about the overall growth
slowdown, both on the domestic
sumption may disappoint more
due to high growth expectations
Andani 5-year asset
ing the extent of the pain, and global fronts. Continuing built into the valuations.
Age: 47 years but maintains conviction negative flows are likely to put
weighted return
in businesses that have a pressure on the currency and Promising theme for the
EDUCATION
B.Com, C.A.
12.48% longer runway for growth.
Adjusting the portfolio
hence exert further pressure on
the markets.
next 3-5 years
A pick up in the investment cycle
EXPERIENCE Risk adjusted for a relatively better would still be a promising theme
22 years Average 5-year AUM returns risk-reward proposition My portfolio is aligned for in the next 3-5 years even though
SBI Mutual Fund `10,969 cr 0.52 should help her maintain a
healthy return profile.
Our portfolio is aligned for reviv-
al in growth. While consumption
the near-term scenario indicates
otherwise.
PROFILE TOP SECTOR BETS TOP STOCK PICKS

D MAN
UN
AG
BEST F
3
ike many fund man-
L Financial Services 42.23% Kotak Mahindra Bank 9.46%
ERS
agers, Shreyash
Devalkar treats the
quality bias as the back-
Technology 11.92% HDFC Bank 7.97% 2019
bone of his approach. But

he also stresses on objec- Consumer defensive 9.09% Bajaj Finance 7.80%
tivity in his quality filters.
At a time when businesses
that exhibit both growth FUND MANAGED ANNUALISED
RETURNS (%)
and quality are quoting a
hefty premium, he insists
this objectivity can bring
some differentiation to his
fund’s performance. This Axis Bluechip 6,501 12.56 11.33
is reflected in the portfo-
lio consolidation and dis-
tinct tilt towards heavy- We remain quality centric. We
weights in Axis Bluechip.
Not surprisingly, the fund
QUICK TAKE are objective in implementing
our Quality and Growth strategy
has proven to be an outlier and are watchful on any disrup-
in the large-cap category What the market tells me tion in any of the businesses we
over the past few years. We have seen a clear bias to- own
Even as its peers have wards quality in this downturn.
struggled to outperform
the benchmark, this fund
Fundamentally weak businesses
have been at the receiving end of
Promising theme for the
next 3-5 years
Shreyash
has generated healthy
alpha. Superior downside
the market’s wrath as investor
confidence has been low. This,
Consumption remains the theme
for us. Consumption includes
Devalkar
protection has helped put coupled with weak demand and financiers (retail banks, NBFCs),
5-Year asset Age: 40 years
weighted return
the fund ahead of competi- poor macroeconomic factors, has durables, staples, auto and dis- EDUCATION
tion. Devalkar insists that led to a steep correction. Much of cretionary. There will be periods 11.81% B.E. (Chemical Engineering),
Masters In Management
with disruption abundant the pain has already been priced where some segments slow down,
Risk adjusted Studies
everywhere, investors in and hence we believe that going but we need to tide over it through returns EXPERIENCE
need to be wary about rich
valuations and narrow-
forward, things should get better
in a phased manner.
a cycle. Demographics and as-
pirations have been in favour of 0.46 Average 5-year AUM 14 years
ing moats, particularly in

large-caps. My portfolio is aligned for
the consumption theme over the
longer term.
`2,276 cr Axis Mutual Fund
cover story
05
UN
AG
BEST F
4 I
n the recent phase char-
ERS
Financial Services 31.48% State Bank of India 8.40%

acterised by a narrow
2019 market, Sailesh Bhan
has remained adamant
Industrials 17.27% ICICI Bank Ltd 8.31%
about not overpaying for
growth. He believes that Consumer Cyclical 13.92% Larsen & Toubro Ltd 6.34%
while chasing momentum
may prove rewarding in the
near term, it eventually does FUND MANAGED ANNUALISED
RETURNS (%)
more harm than good. Bhan
insists that the index often
doesn’t respect valuations, FUND NAME AUM (`CR) 3-YEAR 5-YEAR
and so has chosen higher
weights for companies that Reliance Large Cap 12,261 10.19 11.05
quote cheaper multiples
than the index yet boast
better earnings profile. aligning towards businesses
This fluidity in approach QUICK TAKE which can significantly outper-
has allowed him to play to form in the next three years. The
his strengths. Bhan firmly What the market tells me current volatility has created op-
Sailesh believes that even a small

shift in sentiment would
Performers of the next few years
can be very different from those
portunities and valuations are at-
tractive from a 3-year perspective
Raj Bhan 5-Year asset

yield outsized return in se-
lect pockets. Reliance Large
of the last few years as growth
and valuations shifts happen.
despite slow near-term growth.
Age: 46 years weighted return Cap has repositioned from The narrow markets are creating Promising theme for the
next 3-5 years
EDUCATION
MBA(Finance) CFA (ICFAI) 12.51% its earlier avatar (Reliance
Top 200). But given its large-
opportunities to create alpha over
the next 2-3 years. Domestic cyclicals, corporate
EXPERIENCE Risk adjusted cap tilt since 2014, the fund lenders, pharma and auto sectors
23 years Average 5-year AUM returns manager has continued on My portfolio is aligned for are well positioned from a 3-year
Reliance Mutual Fund `4,998 cr 0.46 the same path. Not overpaying for growth and perspective.
cover story
06

D MAN
UN
Financial Services 38.80% HDFC Bank 9.52%
AG
BEST F
5
arish Krishnan’s Kotak
ERS
Bluechip has held on to
well-run businesses.
Technology 12.86% Reliance Industries 8.06%
2019
Steering clear of financial lev-
erage, he buys debt-laden busi-
Basic Materials 9.91% ICICI Bank 7.90%
nesses only if supported by
ANNUALISED
strong cash flows. The thrust FUND MANAGED RETURNS (%)
is on identifying pockets with
a growing profit pool and fo- FUND NAME AUM (`CR) 3-YEAR 5-YEAR
cusing on businesses that can
best capture the opportunity. Kotak Bluechip 1,303 6.46 9.44
Striving to avoid landmines,
he has ventured a few notches selling few of their illiquid assets
lower on the quality curve QUICK TAKE or refinance. There is no quick fix
owing to the rich valuations and hence don’t expect a dramatic
in the creamy layer. He exited
early from select consumer
India is undergoing a prolonged
recovery. But we are now closer to
the end of the deleveraging cycle.
Harish
stocks into industrials. In
hindsight, Krishnan admits
phase of balance sheet
adjustment. With banks having to My portfolio is aligned for Krishnan
he should have been slower in recapitalise, stressed corporate We are positioned in sectoral 5-year asset Age: 39 years
tweaking the quality profile. groups have had difficulty either leaders that have invested in their weighted return
EDUCATION
10.85% CFA, PGDBM (IIM Kozhikode),
B. Tech (Electronics &
Risk adjusted Communications)
MULTI-CAP FUNDS returns EXPERIENCE
0.37 Average 5-year AUM 14 years
Neelesh Surana `1,197 cr Kotak Mutual Fund
AGE: 50 YEARS
businesses, that have low financial typically conjures up images
EDUCATION leverage and who can capitalise on of debt-heavy businesses with
B.E.(Mechanical), MBA (Finance)
the opportunities in the upcoming significant project delays, cost
EXPERIENCE business cycle. over-runs etc, the upcoming
24 years
infrastructure cycle will be very
Promising theme for the different. There are interesting
D MAN next 3-5 years sub-themes within this broader
UN While the infrastructure theme theme.
AG
BEST F
1
ERS
TOP SECTOR BETS TOP STOCK PICKS

2019 Financial Services 33.29% HDFC Bank Ltd 6.00%
Healthcare 12.15% ICICI Bank Ltd 6.00%
Consumer Cyclical 12.10% Axis Bank Ltd 4.00%
FUNDS MANAGED ANNUALISED

RETURNS (%)
Mirae Asset Emerging

Bluechip
7,499 12.97 18.51
PROFILE
Mirae Asset Tax Saver 2,208 14.31 NA
nother fund steered by Neelesh Surana—
A Mirae Asset Emerging Bluechip—un-

derwent a makeover last year. Even as it
repositioned in the newly created ‘large & mid QUICK TAKE
to banking, domestic consump-
tion, insurance, healthcare, etc.
cap’ category, its large-cap heavy presence under In addition, we believe that there
5-year asset
the previous mid-cap avatar facilitated a smooth Mirae Asset weighted return What the market tells me is good value in many businesses,
transition to the revised mandate. Surana’s im- Global Owing to multiple factors, there particularly where the near-term
pressive track record of outperformance with
this fund continues even today. It was a period
Investments 20.23% has been a sharp correction in
midcap stocks. Many stocks are
earnings trajectory is hazy, but
the long-term prospects are intact.
when the mid-cap segment veered from exuber- now trading at a discount to their
ance to despondency. Yet Surana focused on the historical averages. Given the Promising theme for next
right pockets through stock-specific research Average 5-year favourable ‘price-value’ gap, there 3-5 years
rather than playing on sector rotation. He has AUM Risk adjusted are attractive long-term invest- We are positive on businesses
returns
stitched together the best of large-cap and mid-
cap ideas for this fund, favouring the larger mid-
caps and avoided straying lower on the quality
`3,806 1.01
ment opportunities across sectors.

where the profitability ratios will
‘revert-to-the-mean’ over the next
few years. These include the bank-
ladder. A distinctly superior risk-return profile CRORE Our core portfolio is aligned to ing, consumer discretionary and
puts this fund miles ahead of its peers. structural growth themes related healthcare sectors.
cover story
07
current market environment. We are

TOP SECTOR BETS TOP STOCK PICKS also looking at companies which have
D MAN
UN built or maintained market niches and
Kotak Mahindra
AG
BEST F
2 Financial Services 41.02% 9.19% enjoy favourable pricing power.

ERS
Bank
2019 Consumer Cyclical 14.95% Bajaj Finance 8.40% Promising theme for 3-5 years
Given our demographic dividend and
Technology 14.25% Tata Consultancy 8.20% aspirational population, consumer de-
mand cannot remain subdued for long.
FUND MANAGED ANNUALISED This is likely to remain a strong invest-
ment theme over the next 3-5 years.
RETURNS (%)
Axis Long Term Equity 18,953 9.62 12.92
PROFILE QUICK TAKE

usiness cycles are get- What the market tells me
B ting shorter and compa-

nies that adapt will grab
a disproportionate share of
Markets are negative as inves-
tors have lost their risk appetite
due to a flurry of bad news.
Jinesh the profits. That’s why Jinesh However, this is not likely to
Gopani 5-year asset

Gopani has identified firms
that innovate and are backed
sustain for too long. We see posi-
tive demand in the run up to the
Age: 40 years weighted return
by good managements. He festive season.
also prefers businesses that
EDUCATION
B.Com, Master of
Management Studies
14.81% use capital efficiently. Gopani
sees few opportunities in the
The focus is on companies
EXPERIENCE Risk adjusted market right now, but once the that are industry leaders with
17 years Average 5-year AUM returns
macros recover, he expects a strong balance sheets. The bias
Axis Mutual Fund `11,287 cr 0.68 broad-based upswing. is towards large-caps given the
cover story
08
D MAN
UN
AG
BEST F
35.75% 6.67%
3
traddling three Financial Services ICICI Bank
S
ERS
distinct mandates,
2019
Harsha Upadhyaya Industrials 11.73% HDFC Bank 6.60%
used the inherent
flexibility allowed by Basic Materials 10.95% Reliance Industries 6.02%
each to deftly maneouvre
the portfolio through a
volatile market. He sharply ANNUALISED
culled mid and small-cap FUNDS MANAGED RETURNS (%)
exposure well before the
tide turned against the FUND NAME AUM (`CR) 3-YEAR 5-YEAR
segment in 2018. In fact, he
actively reduced positions Kotak Equity Opp 2,467 8.11 11.63
wherever the margin of
safety was eroding. Even Kotak Standard Multicap 24,960 9.89 13.44
though this resulted in
some underperformance Kotak Taxsaver 896 8.62 12.16
during the last leg of
the rally, it later helped
Upadhyaya protect the
downside much better. over the long term. Our portfolio
He also pared exposure to QUICK TAKE is focused on companies with low
Harsha the consumption theme

early last year, when there What the market tells me
financial leverage and steady
cash flow generation.
initial signs of fatigue The economic recovery is going
Upadhyaya and positives were drying
up. Upadhyaya insists
to be gradual, leading to potential
interim choppiness in the mar-
next 3-5 years
Age: 45 years 5-year asset
he is in no hurry to hike ket. Valuations in domestic equi- Many strong businesses backed
weighted return
EDUCATION
B.E. (Mechanical) National
Institute of Technology,
14.58% exposure to expensive
quality names and will
ties are getting corrected after a
long time.
by focused management teams
are today available at reasonable
continue to remain stock valuations given the short-term
Suratkal, PGDM (Finance) Risk adjusted
IIM Lucknow & CFA US. returns specific. Like many other My portfolio is aligned for challenges. Rather than looking
EXPERIENCE
19 years
Average 5-year AUM
0.64 fund managers, he prefers
to avoid costly mistakes
While protecting downside is im-
portant at present, one should not
at themes, we would want to
focus on stock picking across
Kotak Mutual Fund `12,492 cr and maintain a healthy

diversification at all times.
be too fearful in betting on good
investment ideas to create wealth
sectors.
PROFILE UN
D MAN
TOP SECTOR BETS TOP STOCK PICKS
AG
BEST F
4
ERS
eing a value hawk, Financial Services 32.69% Alphabet Inc Class C 10.74%
B Rajeev Thakkar had
called out the exces-
sive optimism around the
2019
Technology 23.87% HDFC Bank Ltd 9.66%
mid and small-cap segment Bajaj Holdings and
much before the wheel
Consumer Cyclical 21.73% Investment 6.84%
came off the wagon. He
points out that whenever
excesses happen, mean re- FUNDS MANAGED ANNUALISED
RETURNS (%)
version follows and that is
why mid-caps have given FUND NAME AUM (`CR) 3-YEAR 5-YEAR
up the accumulated fat in
recent years. Thakkar had Parag Parikh Long Term
similarly scoffed at the hefty Equity 2,004 10.90 11.22
premiums in the NBFC and
consumption space well
before the rot set in. He has should help us withstand vola-
chosen to align with compa- QUICK TAKE tility better and also to avail of
nies generating consistent opportunities that are otherwise
return on capital employed What the market tells me not available in India. We have
across cycles. He has also
shown comfort in staying Rajeev Given that we are in a low-interest
rate, low inflation and low growth
about 15% in cash and arbitrage
positions which will be deployed
in cash when faced with a
dearth of investible ideas. Thakkar environment, nominal returns
going forward may be low com-
when fresh opportunities emerge.
During the height of the Age: 43 years pared to previous years. This is Promising theme for the
market euphoria, PPFAS 5-year asset not necessarily a bad thing as real next 3-5 years
EDUCATION weighted return
Long Term Value kept as B. Com., CA, CFA returns (adjusted for inflation) Private sector banks could ben-
much as 30% in cash. With
a sharp correction in the
Charter Holder, Grad
ICWA
12.38% would be more or less similar. efit from the troubles being faced
by the PSU banks and NBFCs at
broader market, Thakkar EXPERIENCE Risk adjusted My portfolio is aligned for present. Internet-related busi-
18 years returns
sees opportunities trickling Our portfolio is invested across nesses are also expected to do
through and is poised to
PPFAS Mutual
Average 5-year AUM 0.62 market caps and sectors. Also, we well given the growing role of
deploy the dry gunpowder at
his disposal.
Fund `881 cr are invested to the extent of 30%
in the overseas markets. This
smartphones and the Internet in
our daily lives.
cover story
09
How large sized funds have fared

OVER THE YEARS, as the asset base ets as per asset size—greater than and `5,000 crore, and less than larger sized funds have fared bet-
of equity funds ballooned, a lot of `5,000 crore, between `500 crore `500 crore. In large-cap funds, the ter. Among small-cap funds too, the
debate raged around the relevance larger sized funds have delivered
of size to the performance of the Does asset size matter? better returns during the period un-
fund. Does size really matter? Are der consideration. Within the multi-
larger sized funds better positioned 5-YEAR MEDIAN CAGR (%) cap funds category, the larger sized
over smaller peers or are they hand- ASSET SIZE (`CR) LARGE-CAP MULTI-CAP MID-CAP SMALL-CAP funds have fared marginally better
icapped by their own heft? than mid-sized funds. However,
There is no conclusive evidence >5,000 9.6 9.4 10.8 11.8 there is nothing separating the two
supporting either argument. We in the mid-cap category. Across
looked at the five-year performance 500-5,000 8.2 9.6 11 9.1 all fund categories, however, the
of different equity fund categories, smallest of funds have put up a poor
subdivided into three distinct buck-
<500 8.9 5.2 7.9 6.6 showing.
Data as on 30 June Source: Ace MF
cover story
10
5-year asset
UN
D MAN
Principal Mutual weighted return TOP SECTOR BETS TOP STOCK PICKS
AG
BEST F
5
Fund
15.31% Financial Services 29.30% HDFC Bank 5.64%
ERS
2019 Average 5-year AUM Risk adjusted returns Consumer Cyclical 15.31% ICICI Bank 4.45%
`1,066 cr 0.58 Basic Materials 13.56% Reliance Industries 2.61%
ANNUALISED
himant Shah FUND MANAGED
PROFILE D believes
the seg-
mentation of investible universe polarised
FUND NAME
Principal Emerging Bluechip

AUM (`CR)
2,051
3-YEAR
RETURNS (%)
7.12
5-YEAR
13.53
the market. Liquidity dried up, necessitating
a shift towards safety over everything else.
Consequently, it took him some time to rea- Near term is going to be volatile
lign the small-cap heavy Principal Emerging QUICK TAKE and we are relatively defensive.
Bluechip to its new mandate. But the market
cannot remain so polarised for long, asserts What market tells me Promising theme for the
Shah. He acknowledges that growth is increas- Earnings recovery is likely to be next 3-5 years
Dhimant EDUCATION
ingly coming from newer business models,
which are not yet represented in the indices. He
weaker than expected. Markets
will remain sideways till end of
Insurance and healthcare seem
good. Telecom likely to do well
Shah B Com, ACA

EXPERIENCE
has put his weight behind businesses that have
sustainable competitive advantage and man-
2019. Mid, small caps look good. over the long term. Chemicals can
do well given the shift from China
Age: 46 years 19 years agements that use capital efficiently. Portfolio is aligned for due to environment concerns.
MID & SMALL CAP FUNDS

Shreyash TOP SECTOR BETS TOP STOCK PICKS
Devalkar Financial Services 24.73% Info Edge (India) 6.17%

AGE: 40 YEARS
EDUCATION
Consumer Cyclical 19.19% City Union Bank 5.19%
B.E. (Chemical Engineering),
Masters In Management Studies Avenue
Technology 12.29% Supermarkets 4.98%
EXPERIENCE
14 years
FUND MANAGED ANNUALISED

D MAN RETURNS (%)
UN
AG
BEST F
1
ERS
Axis Midcap 2,634 9.73 11.62

2019
that are doing well has come down

QUICK TAKE in the past one year. For example,
auto ancillaries in the mid-cap
What the market tells me space are getting impacted due
The market was fully discovered to the slowdown. Some NBFCs
across market cap segments by have also slowed down as a result
2017 end. After that, across large, of this. Hence, we are focusing
PROFILE mid and small-caps, there are
a set of stocks which are giving
more on sectors and companies
which are likely to deliver rela-
hreyash Devalkar says a lot of caution and returns while rest are underper- tively higher earnings growth.
S spadework is needed while navigating the

mid-cap terrain. Gauging the promoters’
merit and execution capabilities is critical for
forming. In the past three years,
the percentage of stocks that have
given good returns (more than
Accordingly, the portfolio is
getting more concentrated and
nimble.
this segment. He prefers to align with businesses 10% CAGR) in all three buckets
5-year asset
that either have leadership position within a weighted return are almost the same. Contrary to Promising theme for the
niche area or are capable challengers in a larger
Axis Mutual what benchmark indices show, next 3-5 years
playground. Clearly, differentiating between
growth and sustainability has been a central pil-
Fund
18.48% mid-caps as a category has not
underperformed large-caps. The
Mid-caps normally give uneven
returns due to stocks getting dis-
lar to his approach to this segment. Devalkar’s market will get more discerning covered and stronger earnings
strict focus on quality has led to a very compact and objective as far as quality and growth due to their niche business
portfolio featuring only the highest conviction Average 5-year growth is concerned. and low base. The investment
bets scoring high on different aspects of qual- AUM Risk adjusted theme for mid-caps has always
returns
ity. Across time periods, he has been effective in
taming the fund’s risk profile, offering superior `1,003 0.88
We continue to own quality and
been India-centric businesses and
mostly consumption focused com-
downside protection in a high-risk segment. Not
surprisingly, the fund boasts the best risk-return
CRORE growth stocks across portfolios.
We are more objective on the phi-
panies, including retail banks,
NBFCs, durables, staples, auto
profile among peers in its category. losophy. The number of sectors and discretionary.
cover story
11
UN
AG
BEST F
2 W
hen mid-and-small-
ERS
caps were rallying Consumer Cyclical 20.62% JK Cement Ltd 4.61%

2019 a few years ago,
R. Srinivasan kept a wary
eye on the rising valuations
Industrials 20.32% Hawkins Cookers 4.30%
and heavy inflows into his
fund (earlier SBI Small & Basic Materials 18.43% Dixon Techologies 3.55%
Midcap). As inflows rose
beyond the fund’s capacity
to absorb them, it stopped
fresh investments. However, FUND MANAGED ANNUALISED
RETURNS (%)
following the recategorisa-
tion, when the fund adopted
the small-cap mandate, it
found access to a larger in-
vestible universe with high- SBI Small Cap Fund 2,256 10.80 18.29
er market capitalisation and
was partially reopened in
mid-2018. Srinivasan also
R. spread out the portfolio to

soften the fund’s risk pro- QUICK TAKE
a good management and a good
price. It’s about weighing these
Srinivasan file. He prefers companies

with some competitive ad- What the market tells me
characteristics for their intensity
or closeness to where you want
Age: 48 years 5-year asset vantage, scalability, better Adjusted for risk, the market them to be and choosing the right
weighted return cash conversion and longev- has just about started to look combination.
EDUCATION
M.Com , MFM
EXPERIENCE
20.94% ity. He also seeks higher
margin of safety, which he
attractive in the small cap space.
Risk adjusted reckons is critical in this My portfolio is aligned for next 3-5 years
27 years returns
Average 5-year AUM segment. This has ensured a We are looking for three basic This is a pure bottom-up
SBI Mutual Fund `800 cr 0.80 healthy risk-return profile. characteristics – a good business, philosophy.
cover story
12
D MAN
UN
AG
BEST F
3
ankaj Tibrewal
P 26.40% 3.52%
ERS
Basic Materials PI Industries Ltd

maintains a strict
2019
focus on protect-
ing the downside and Consumer Cyclical 17.81% Supreme Industries 3.28%
minimising errors. He
refuses to deviate from AU Small Finance
Financial Services 17.56% Bank Ltd 3.16%
the chosen investment
philosophy, insisting
that this consistency will
reflect in the outcome FUNDS MANAGED ANNUALISED
RETURNS (%)
later. He prefers to align
with businesses boasting
a high quality franchise
and a tested management
with the ability to scale up Kotak Small Cap 1,121 2.35 10.28
while maintaining capital
efficiency. Tibrewal lays Kotak Emerging Equity 4,321 6.00 13.85
strong emphasis on main-
taining a healthy liquidity
in the portfolio, reflected
in the sizing and nature
of his bets. He was early My portfolio is aligned for
QUICK TAKE
Pankaj to spot the opportunity
in specialty chemicals
We are using this correction and
volatility as an opportunity to
Tibrewal and select contra bets in
cement and industrials Post the sharp correction in mid
own quality businesses avail-
able at decent valuations from a
Age: 40 years 5-year asset
worked well. He avoids and small-cap stocks over the last medium to long term perspective.
weighted return firms with highly lev- 18 months, we believe the perfor-
EDUCATION
Commerce graduate from
St. Xavier‘s College, Kolkata
14.83% eraged balance sheets
to side-step the traps
mance between mid-small caps
vis-à-vis Nifty is at historical next 3-5 years
camouflaged as growth. extremes. History suggests that We believe cement, private sector
and holds Masters in Finance Risk adjusted
from Manchester University. returns Tibrewal also believes in such divergences don’t exist for corporate lenders and early cycle
EXPERIENCE
18 years
Average 5-year AUM
0.58 healthy diversification to
minimise risk, reflected
too long. Post such large under-
performances, mid-small caps
capital good companies can be
interesting investment themes
Kotak Mutual Fund `2,445 cr in the superior downside

capture in his fund.
tend to outperform large-caps
over the next 12-18 months.
for next 3-5years.

D MAN
UN
20.40% 4.08%
AG
BEST F
Financial Services HDFC Bank Ltd

4
ERS
ill a few years ago,
T the very high quality

businesses offered
healthy earnings growth.
2019
Basic Materials
Consumer Cyclical
18.58%
14.40%
Voltas Ltd
Kotak Mahindra Bank

2.32%
2.29%
But now, even this creamy
layer has been buffeted
by the slowdown in the ANNUALISED
economy. While there has FUNDS MANAGED RETURNS (%)
been some correction in
prices in this segment, the FUND NAME AUM (`CR) 3-YEAR 5-YEAR
layer below the highest
quality has seen a sharper Franklin India Smaller Co. 6,729 1.73 10.40
correction, points out R.
Janakiraman. He finds that
Franklin India Prima 6,686 5.49 12.24
even as the high quality
segment now trades at
fair prices, the bigger ations of many such businesses
opportunity exists one notch QUICK TAKE quite attractive. The fund has ei-
lower down the quality ther upsized such positions or has
ladder. Janakiraman’s focus What the market tells me introduced a few new stocks. The
during this period has been
towards making the portfolio R. It is evident that we are in the
midst of a broadbased slowdown.
intent is not to time the recovery,
but to use the downcycle to make
robust and compact,
improving its quality Jankiraman Risk aversion has risen in the
lending side and is unlikely to
the portfolio more robust.
profile without affecting Age: 48 years wear off simply on the back of Promising theme for the
its risk positioning. Being a 5-year asset better liquidity. A reasonably next 3-5 years
seasoned campaigner in the EDUCATION weighted return satisfactory monsoon, social wel- Apparels and chemicals are two
mid and small-cap segment,
Janakiraman knows better
BE, PGDM (IIM Bangalore)
EXPERIENCE
13.53% fare transfer payments and stable
crop prices should bring about a
big opportunities. Online busi-
nesses or aggregators, logistics
than to be adventurous in 22 years Risk adjusted stronger rural demand. and allied categories are likely
returns
this space. Cutting down on to see good growth from rise in
risks has taken precedence
Franklin Templeton
Average 5-year AUM 0.54 My portfolio is aligned for smartphone and broadband pen-
over identifying the next big
idea.
Mutual Fund `9,572 cr The ongoing weakness in the mid-
cap segment has made the valu-
etration. Healthcare likely to see
sustained growth.
cover story
13
D MAN
UN
AG
BEST F
5 21.58% 2.60%
mid the high degree
A
Basic Materials Ramco Cements Ltd
ERS
of polarisation even
in mid and small-
2019
cap indices, S.N. Lahiri
Consumer Cyclical 19.66% City Union Bank Ltd 2.30%
has kept re-evaluating
existing ideas. He ac- Industrials 15.21% Abbott India Ltd 2.00%
knowledges that valua-
tions got too expensive
earlier at a time when ANNUALISED
earnings were not quite
FUNDS MANAGED RETURNS (%)
coming through. In such
a situation, it helps to be FUND NAME AUM (`CR) 3-YEAR 5-YEAR
index agnostic and take a
pure bottom-up approach, L&T Midcap 4,805 7.26 13.05
he insists. He has also
been inclined to diversify L&T Emerging Businesses 5,611 8.03 12.94
more heavily than before
given the higher degree of
uncertainty. Lahiri feels
that the current sell-off is to companies that have a strong
justified in some names, QUICK TAKE corporate governance framework
but overdone in others. along with a good management
S.N. Lahiri In hindsight, he feels he
could have sold some of The recent correction in the
track record. Additionally, we
look for three filters in such com-
Age: 52 years the better performers, but equity markets has provided panies: Entry barriers, scalable
maintains that businesses attractive entry points for opportunities and reasonable
with inherent strengths— quality companies available at price.
5-year asset
EDUCATION weighted return differentiated products, reasonable valuations, more so
B.E (Mechanical), PGDM
– (IIM Bangalore)
EXPERIENCE
14.69% wide moats, pricing
power—have the ability
in the mid- and small-cap space.
Earnings revival and resolution next 3-5 years
to come back stronger. of NPAs in the banking system We are positive on the infrastruc-
29 years Risk adjusted
returns Lahiri places a lot of em- will be the key drivers for the ture segment at this point in time.
L&T Mutual Fund

Average 5-year AUM
`3,496 cr 0.54 phasis on bringing con-

sistency to fund returns
markets. Order book accretion, increase
in capacity utilisation and strong
rather than focusing on My portfolio is aligned for execution have been driving the
creating huge alpha. Our portfolio focus is aligned sector so far.
How we ranked the managers

UNIVERSE OF FUNDS primary fund manager is considered as a
Our study is restricted to open-ended, ac- manager for the fund in this analysis.
tively managed, diversified equity funds
segregated into three distinct categories— RISK AND RETURNS
large cap, multi cap (includes ELSS and After shortlisting the fund managers, the
‘large & mid’ cap) and mid & small cap—as aggregate returns generated by each fund
per the Morningstar India classification. manager were calculated over the five-year
Schemes with a corpus of at least `200 crore period for all the funds managed by him
were considered. No index, thematic, sec- which satisfied the qualifying criteria.
tor or balanced funds were considered for The returns were then adjusted for risk.
evaluation. This is to account for the degree of risk
taken by the fund manager to generate
TIME PERIOD the return. To get the risk-adjusted score,
The study is based on the performance of the asset-weighted monthly returns of all
funds managed between 1 July 2014 and 30 the funds satisfying the above-mentioned
June 2019. criteria were calculated. Weighing scheme
performance by its corpus size helps give
EXPERIENCE & AUM CRITERIA due importance to the size of each fund.
Only funds managed continuously for the Then, the annualised geometric mean
five-year period under study were consid- for the five-year period was calculated to
ered, with the exception of fund managers arrive at the annualised five-year returns.
who have up to four month gap between Further, the annualised standard devia-
two stints. Track record only for completed tion of the monthly asset-weighted returns
months was considered for this analysis. was calculated.
For a fund to qualify, the fund manager The final risk-adjusted return was calcu-
needed a minimum two-year track record lated by deducting the risk-free return—re-
with that fund as a lead manager. The study turn of FBIL MIBOR Overnight—from the
was restricted to fund managers cumula- annualised geometric returns generated
tively managing an AUM of at least `500 by each fund manager, and dividing these
crore, across all qualifying funds. Only the by the respective standard deviation.
learn & keep
14 The Economic Times Wealth September 2-8, 2019
Small measures, big impact

Even seemingly small tweaks can have a significant impact on your savings over the long term. Preeti Kulkarni shows you how.
Don’t buy a term plan to cover retirement Buy a longer term health cover
Age 40 years 41 years
This is how
Age now 35 years 35 years much a One-year premium `7,386 `9,103 * For a
35-year-old `5lakh
Tenure 20 years 40 years non-smoker Premium over 2 years cover
Age at maturity 55 years 75 years male will if one does not lock into `16,849 with
pay to buy unlimited
a `1-crore
current rates at 40
recharge
Annual premium `9,204 `14,514 term plan Premium for 2 yrs if paid from
from Max Life
at one go at 40 `13,665 Religare
Total outgo `1.84 lakh `5.81 lakh Insurance. Health
Savings* `3,184 (23.27%)
Smart tip: A life cover is meant to replace your income and provide for your
dependants in case of your death. Therefore, it is not needed after retirement. If
Smart tip: Your premium will rise steeply as you turn 41, as the age slab will change. You
you wish to leave behind a legacy, create a kitty over time instead.
can save by buying a two- or three-year cover, by locking into the current slab’s premium.
You can also pocket longer-tenure premium discount by paying at one go.
Be a 'least risky' borrower for banks

Risk group 1 4 Invest in direct plans of mutual funds
* For a
Home loan salaried,
interest rate
8.65% 8.75% male taking Age Regular plan Direct plan
`2-lakh
a `75-lakh invested in
MCLR-based an equity
Interest outgo `82.92 lakh `84.07 lakh home loan
Expense ratio 1.75% 1.25% fund
with a 20- yielding
Savings on Final corpus
`1.15 lakh year tenure
after 20 years
`14.08 lakh `15.41 lakh 12% gross
interest outgo* from SBI. per annum
with a
Difference - `1.33 lakh 20-year
Smart tip: While banks use their internal risk scoring mechanism to categorise borrowers, credit investment
score is a key parameter. Borrowers with CIBIL credit scores of over 750 are considered least risky. horizon.
Ensure you pay your credit card bills, EMIs and utility bills on time to boost your score. Smart tip: Investing through direct plans of mutual funds can
make a substantial difference to your final corpus.
Hike EMI nominally when interest rates go up
If the interest
Savings if you
increase the EMI
Don’t surrender Ulip in Good health saves you more Auto pay bills to avoid late charges
rate is raised… marginally… the fourth year Utility Late payment fee
*For
Home loan If the
Newinterest rate is raised…
rate of interest Original EMI
outstanding
amount of
Annual MTNL `20
`50 lakh 8.75% `43,391 Assuming `10,000-
Y
premium for
PA
a loading 25,000 if not
Interest New tenure New EMI a 35-year-old of 30% on MSEB `70# paid on due
healthy individual Annual the health date; could
8.5% 21 years `44,186 Surrender Surrender premium for insurance Mahanagar Gas `100 vary as per
charges in `6,300 diabetes* premium bank and
Original tenure Interest payable Extra payment per month charges year
year 4 5 onwards patient payable. Credit card `800* card #For a
20 years `59.53 lakh `795 `2,000 `8,190
*For a `5 bill amount of
*Savings Nil lakh cover Total `990 `3,230.
EMI Additional interest Interest payable compared
to higher
`43,391 `5.39 lakh `56.04 lakh interest Smart tip: Don't surrender Ulip after paying premiums in the fourth Smart tip: Premium loading depends on the insurer. It can Smart tip: Missing utility and credit card bill payments for a month could
Interest payable Savings on interest* outgo if
EMI was year. Hold on for a year. This will save you discontinuance charges, range from 30-300%, as per Wellthy Therapeutics. Final premium result in sizeable penalty outgo. Instead, opt for billpay and issue stand-
`54.14 lakh `3.49 lakh not hiked. especially if you can afford to pay premium for another year. depends on multiple factors. ard instructions for credit card bill payment to avoid these charges.
Source: MortgageWorld
guest column
Tricks we need to help

people choose right
Just spreading awareness is perhaps not enough to get people to make the right
financial choices. It’s time for some tricks, says Dhirendra Kumar.
W
hy don’t people do what they
should be doing for their own
good? It’s a tough question,
DHIRENDR A KUMAR
CEO, VALUE RESE ARCH or maybe it’s a foolish one or
may be both. However, when
it comes to creating a behavioural change,
money there seems to be a widespread belief that
mysteries exhorting people to do the right thing is

enough. We see this in many areas—in fact,
almost all of the so-called public service ad-
vertising is an example—but there are many
others.
Take the case of the ultimate no-brainer in
Would you buy a personal finance—term insurance. Anyone
who has an income and has dependants
tontine? I would
should have term insurance, and yet there is
definitely consider one. a great deal of resistance among many peo-
At some point, tontines ple against buying something that doesn’t
were banned, apparently give back anything. Much of this behaviour
because of some scams. may have been taught by insurance agents
Or maybe members but it’s nonetheless real. How can this be
started murdering each changed? The generally acceptable answer
is that someone should educate people about
other. In any case, it’s
insurance, the idea being that those who re-
possible that a tontine- fuse to buy insurance do so out of ignorance
like system would and if one fixes ignorance then the problem
encourage more retirees can be fixed.
to buy annuities. Sure enough, for a small proportion of
people this is true but such attitudes are deep
GETTYIMAGES
set. The attempt to change the psychology

of savers may need a trick. Here’s a trick
that, long ago, would get people to buy insur-
ance. In the late nineteenth century, when
insurance companies were first trying to get
people to buy their products, there used to be pany got full possession of the deposited is called a Uniform Invoice System with a
a form of annuity called a ‘tontine’. In a ton- amount. In effect, buying a membership common numbering system and on the 25th
tine, a group of people of similar age would of a tontine was a bet on your own longev- of every odd-numbered month, lottery win-
buy from an insurance company what would ity, but with the added bonanza that the ners are announced.
longer you lived, the more financially The prizes are quite hefty, ranging from
In personal finance, there’s comfortably you were. a single first prize of TWD 10 million (about
Would you buy a tontine? I would defi- `2.3 crore) down to numerous TWD 200
so much that is wrong with nitely consider one. At some point, ton- (`460) prizes. There’s some sort of a grada-
choices people make that tines were banned, apparently because tion system which makes a connection be-
of some scams. Or maybe members tween the size of the purchase and the level
perhaps some innovative started murdering each other. In any of prize that one is eligible for.
thinking is needed. case, it’s possible that a tontine-like sys-
tem would encourage more retirees to
At the retail level in India, honesty in tax-
ation would probably get a huge boost from
effectively be a single, joint annuity. They buy annuities. Perhaps a modern tontine something like this. Buyers would insist on
would each get their share of the income that could be designed whereby members are proper billing because the invoices would
was generated by the annuity amount. When anonymous to each other. Of course, in- also be tickets to a lucrative lottery. The
any member died, his share would go back surance is so heavily regulated that it’s cost of the prizes would be trivial compared
into a common pool. effectively limited to the same (ineffec- to the tax revenue.
Thus, the total income stream from the an- tive) business model so it’s unlikely that Of course, in practice, neither of these
nuity remained constant. It was paid out to one would ever see any modern tontine. things are going to happen. However, the
all survivors, divided equally between them. Here’s another example of an unusual fact is that the oddest things can change be-
This made the product quite unique. As time money-related trick that could come havior, for better or for worse. In personal
went by, and members died one by one, those in useful for the government in getting finance, there’s so much that is wrong with
who were still alive got a higher and higher customers to force sellers to not do unac- the choices that people make that perhaps
income. When only a handful survived (ton- counted business. Since 1951, Taiwan some innovative thinking is needed.
tine groups generally had 20 to 50 members), has had a national lottery system whose
then the income was enormous compared tickets are the invoices that are issued
Please send your feedback to
to what it had been in the beginning. When for retail purchases by shops across the
etwealth@timesgroup.com
the last member died, the insurance com- country. The entire country follows what
stocks
The Economic Times Wealth September 2-8, 2019 17
Take the SIP route to direct

equities and manage volatility
Online platforms offer SIP in direct equities. Investors can fix amount or number of shares to be bought.
by Sameer Bhardwaj
S
tock markets are witnessing
increased volatility, which is
evident from the significant jump
in the average VIX or volatility in-
dex levels. The fear index jumped
30% between August 2018 and August 2019,
relative to -4% between August 2017 and
August 2018. When market conditions are
erratic, the systematic investing plan (SIP)
mode of investing is highly recommended,
as it allows you to invest small amounts
every month.
The SIP mode of investing helps in mini-
mising risks and promotes disciplined in-
vestment planning. It encourages regular
savings that helps in wealth accumulation
and proves very useful for risk-conscious
investors. The arrangement enables inves-
tors to operate in both rising and falling
markets and thereby helps them derive
GETTYIMAGES
benefits of volatility. SIPs are generally
used while investing in mutual funds
where the units are purchased regularly
using the fund’s NAV and it averages out
the buying cost of units.
Experts believe volatility in equities
will continue unless corporate earnings
Small, regular investments yield more in the future.
improve at the macro level. Under such con- Investing through SIPS helps in minimising risks and encouraging regular savings. Marico
ditions, direct equity investors can use the The company has maintained market lead-
3-yr return (%) Estimates Q1: 2019-20 (y-o-y growth in %)
SIP route to invest small amounts in stocks ership and posted strong volume growth
at different intervals, thereby taking ad- Operating Adjusted in both domestic and international opera-
Company SIP Lump sum ROE PE Sales
vantage of the unpredictable stock price profit EPS tions in the June 2019 quarter. The SIP
movements. Most online trading platforms Asian Paints 19.1 11 26.1 53.4 16.6 24.1 17.7 mode is preferred here as analysts feel that
offer SIP in direct equities and allow inves- the current valuations reasonably mirror
Marico 14.6 10.7 36.2 42.3 6.9 25.4 20.8
tors to fix either the amount to be invested the long-term growth opportunities and
or the number of shares to be purchased at Pidilite Industries 29.8 25.1 25.5 55.8 10 16.9 22.7 potential earnings fluctuations from the
pre-defined intervals for a fixed tenure. SRF 32 19.6 18.3 18.8 8.7 23.5 41.2 overseas operations.
The online system automatically exe-
cutes the transaction on the date defined by PE and ROE (%) estimates are 12 month blended forward. Operating profit
include other income. Source: ACE Equity & Bloomberg.
Pidilite Industries
the investor. The intervals can be weekly, In the June 2019 quarter, recovery in vol-
fortnightly or monthly. For example, an ume growth and price hikes helped the
investor can decide to buy 10 shares every ing from August 2014. It is assumed that We found 18 stocks that have comprehen- company to deliver strong profits. In terms
month or can fix `5,000 to be invested 10 shares are purchased every month and sively delivered SIP annualised returns of valuation, ICICI Direct believes that the
every month. In the first case, the monthly final investment value of the cumulative that were higher than CAGR lump sum re- current price discounts major key factors
invested amount will be `2,520 (`252 X 10 number of shares is calculated at the clos- turns across the three defined time frames. like strong revenue, earnings growth along
shares), if the share is trading at `252 on ing price of 19 August 2019. Annualised Let us look at four out of 18 stocks that not with strong balance sheet with healthy
the trigger date or the specified date of pur- IRR is used for SIP returns and CAGR is only have sound fundamentals, but their return ratios.
chase. On the other hand, if the investor used for lump sum returns. future price movements are expected to
chooses to invest `5,000 every month, the Let us demonstrate the functionality of remain volatile due to their current rich SRF
system will purchase 19 shares, utilising SIP in direct equities for a 3-year tenure valuations. As SIP works well when price The company has reported strong num-
`4,788 out of the allocated amount of `5,000. using Apollo Hospitals Enterprise. In 36 movements are expected to remain erratic, bers in the June 2019 quarter. A recent
The above calculations are just for illus- months, 360 shares are purchased between systematic investments can be considered Edelweiss report believes that the chemical
trative purposes and does not include the August 2016 and July 2019 (10 shares every in such stocks. business will continue to see robust growth
impact of the brokerages or commissions month X 36 months). The price of Apollo and overseas expansions will benefit the
that are charged by the respective trading Hospitals on 19 August 2019 was `1,484 and Asian Paints packaging films segment in the future.
platforms. therefore, the market value of investments The company has reported strong numbers However, the report mentions concerns
Data for 900 stocks with a market cap works out to `5.34 lakh. The annualised SIP in the June 2019 quarter. However, analysts regarding over-supply in packaging films
greater than `500 crore were studied to IRR works out to 15%. On the other hand, if feel the current valuations fully captures and auto sector slowdown, which will limit
identify stocks in which SIP investments 360 shares are purchased at the beginning the company’s growth potential and the future price performance.
have comprehensively outperformed lump of the tenure, which is on 31 August 2016, market outlook is unexciting. The compa-
sums across 1-year, 2-year and 3-year time the purchase value would have been `4.85 ny has already surpassed Bloomberg’s esti-
frames. Closing prices on the last trading lakh (360 shares X `1,348.85). The three mated one-year target price and therefore, Please send your feedback to
day of every month is considered, start- year CAGR for lump sum works out to 3.2%. there is a likelihood of volatile price swings
mutual fund
Arbitrage funds are not riskier,

but don’t suit all investors
Some fund houses have started side pocketing in arbitrage funds, but investors need not panic.
market is going up or when it is volatile.
However, arbitrage opportunities recede
when the market slides,” says Lakshmi
Iyer, Head of Fixed Income and Product,
Kotak Mutual Fund. In other words, be
ready for short-term volatility in arbitrage
fund returns. Though the average return is
around 6%, it is high for a few months and
low for the rest.
Volatility in short-term returns can
also occur because of the mark to market
valuation rules. What arbitrage funds do
is simultaneously buy in one market and
sell in another market to corner the price
difference. Let’s assume that a scheme
buys Infosys for `780 in the cash market
and sells it for `800 in the 3-month future
market and pockets the difference—`20 or
absolute return of 2.6% for three months.
However, this locked-in profit can be
realised only when the arbitrage trade is
finally settled. The scheme will be forced to
report losses if the gap widens in between.
Arbitrage funds reporting small daily
losses is thus common.
Not for short-term investors

GETTYIMAGES
To keep away short-term players, most

arbitrage funds charge an exit load if you
withdraw your money within a month.
Since active futures and options contracts
in India are for three months, the short-
by Narendra Nathan low risk product, had been high in recent trage funds as the fund houses have to keep term marked to market volatility is high
weeks because of their worry over debt the average equity exposure above 65% to for this time period. “Don’t use arbitrage
M
ost mutual fund investors funds. However, some fund houses have avail of equity taxation benefits. However, funds as a substitute for liquid funds
were always aware about started side pocketing in arbitrage funds the actual debt holding is not small either. and park your money for a few months.
the risks in equity funds. as well. Does it mean arbitrage funds There are several large arbitrage funds Arbitrage funds should be used only if the
It’s only recently they have have turned riskier? Not really. Investors with a debt exposure of 15-20%(see chart). holding period is at least four months,”
become acquainted with the should not panic because what fund houses Though most mutual funds try to manage says Vijay Singhania, Founder & Director,
risks in debt funds—after mutual funds are doing now is ‘enabling provisions’, or the debt portion safely, it is impossible to Trade Smart Online. Bala feels the ideal
started ‘side pocketing’ downgraded debt preparing for the future. avoid debt-related risks completely. This is holding period for arbitrage funds is a year.
papers. Side pocketing entails removing The reason is such schemes have some because a default can occur even in AAA “If the holding period is less than a year, it
defaulted or downgraded papers from debt component in their portfolios. “Don’t rated companies. IL&FS and DHFL were is better to be in less volatile overnight debt
the main portfolio. The NAV of the main assume arbitrage funds are pure equity AAA-rated before being downgraded. funds. The one year holding period also
scheme is marked down to that extent and funds. They invest in debt instruments makes it tax efficient, attracting long-term
the scheme continues as an open-ended when arbitrage opportunities are not Other risks capital gains tax of only 10%,” she says.
one. The side pocketed scheme, created there,” says Vidya Bala, Co-Founder, Arbitrage funds also face two other risks.
with defaulted or downgraded papers, re- Redwood Research. This means some debt The first is the periodic lack of arbitrage Not for long-term too
mains close-ended. The money is returned related risks like interest and credit risks, opportunities. Arbitrage opportunities “Though the risk is low, arbitrage fund is
to investors if some recovery is made. will be applicable here too. are not constant and come in phases. not a long-term product because returns
Investor interest in arbitrage funds, a The debt component is not high in arbi- “Arbitrage opportunity is high when the are also limited,” says Singhania. This is
because arbitrage strategy used to contain
downside risk also caps its upside. The pos-
sible gain here is only the locked-in profit.
Arbitrage SCHEME
DEBT
COMPONENT (%) 1-YEAR
CAGR (%)
3-YEAR 5-YEAR
EXPENSE
RATIO (%)
Long-term investors should consider
funds have growth investments like equity mutual
funds instead. Taxation advantage of
Axis Arbitrage Fund 19.53 6.40 6.17 6.48 0.99
reasonable arbitrage funds against debt funds also
exposure UTI Arbitrage Fund 19.31 6.79 6.21 6.56 0.82 diminish when the holding period is above
three years . The difference between 10%
to debt ICICI Pru Equity-Arbitrage Fund 18.87 6.63 6.15 6.57 0.95 tax and 20% tax after indexation benefit is
No mutual fund can not much.
IDFC Arbitrage Fund 16.01 6.84 6.19 6.50 1.08
completely avoid
debt-related risks. SBI Arbitrage Opportunities Fund 15.04 6.68 6.14 6.48 0.88 Please send your feedback to
Only schemes with AUM of `1,000 cr or above considered. Source: ACE MF; Compiled by ETIG Database etwealth@timesgroup.com
family finance
Invest in line AMIT & SNEHA, 35 & 30 YEARS, SALARIED, BENGALURU
with goals How to invest for goals

GOAL
FUTURE COST (`) /
TIME TO ACHIEVE
RESOURCES
USED
INVESTMENT
NEEDED
(`/MONTH)
The Bengaluru-based couple will have to increase Emergency fund 2.5 lakh
Cash,fixed
-
deposit, bonus
their equity exposure and secure their risks. Mutual funds,
1st child’s education 37.9 lakh / 14 yrs 2,845
insurance
by Riju Mehta 2nd child’s education 83.3 lakh / 18 yrs - 11,717
Portfolio
A
mit and Sneha stay in 1st child’s wedding 38.1 lakh / 23 yrs - 2,860
Bengaluru with their two kids,
aged three and six months. CURRENT VALUE
ASSET
(`) 2nd child’s wedding 42.9 lakh / 25 yrs - 2,521
Both are employed and get a
combined monthly salary of Real estate 1.16 crore
`94,142. After considering all their ex- Retirement 2.15 crore / 25 yrs PPF, EPF 5,871*
penses and investment, the couple is left Cash 55,000
Investible surplus
with a surplus of `12,182. Their portfolio 25,814
Debt needed
includes `1.1 crore of real estate, with one
self-occupied house and another as invest- * Investment for this goal also includes `42 in the PPF every month.
Fixed deposit 1 lakh Annual return assumed to be 12% for equity and 7% for debt funds. Inflation assumed to be 7%.
ment. They have taken two home loans
of nearly `60 lakh, and are paying EMIs PPF 62,000
of `38,900. Besides, they have `55,000 in
cash, `1.7 lakh of equity mutual funds, EPF 2.69 lakh
and debt worth `7.9 lakh in the form of
EPF, PPF, fixed deposit and insurance
value. Their goals include building a
Insurance 3.65 lakh
Insurance portfolio
contingency corpus, buying a car and a
Equity
EXISTING SUGGESTED
EXISTING
house, taking a vacation, saving for their Mutual funds 1.71 lakh MONTHLY MONTHLY
INSURANCE COVER SUGGESTIONS
kids’ education and weddings, and their (`)
PREMIUM PREMIUM
retirement. The couple will have to put off Total 1.26 crore (`) (`)
their goals of buying a car and taking a va-
cation for now due to lack of surplus. Life insurance
LIABILITIES CURRENT VALUE (`)
The financial planning team from
Fincart suggests they build the emer- Term plan - - Buy `2.7 crore 2,330
Home loans (2) 60.08 lakh
gency corpus of `2.5 lakh, equal to four
months’ expenses, by allocating their Total liability 60.08 lakh Traditional
19.2 lakh 7,643 Surrender all -
cash, fixed deposit and annual bonus of `1 plans (4)
lakh. This amount should be invested in Net worth `66.13 lakh
an ultra short duration fund. For the edu- Ulips - - -
cation of their children in 14 and 18 years,
the couple has estimated a need of `37.9 TOTAL 19.2 lakh 7,643 `2.8 crore 2,330
lakh and `83.3 lakh, respectively. For the
older child, they can allocate their mutual
fund corpus and insurance surrender val-
Cash flow Health insurance
ue. In addition, they will have to start an EXISTING SUGGESTED
SIP of `2,845 in a diversified equity fund. (`) (`)
Employers’ 5 lakh - - -
For the younger child, they will have to
start an SIP of `11,717 in a diversified Income 94,142 94,142 Buy `5 lakh family
equity fund. For the children’s weddings
Own - - floater + `20 lakh 1,662
in 23 and 25 years, the couple wants `38.1 Outflow top-up plans
lakh and `42.9 lakh, respectively. They
Household 25,000 25,000 TOTAL 5 lakh - `30 lakh 1,662
will have to start SIPs of `2,860 and `2,521 expenses
in diversified equity funds, respectively.
Critical illness
For retirement, the couple will need `2.5 Home EMI 38,900 38,900 & accident - - - -
crore in 25 years and will have to allocate
Insurance disability
their EPF and PPF corpuses. They will 7,643 3,992
also have to start an SIP of `5,871 in a premium
TOTAL - - - -
diversified equity fund and continue to
Investment 10,417 25,856
invest `500 a year in the PPF. Insurance cost - 7,643 - 3,992
For life insurance, the couple has four
traditional plans and are advised to sur-
Total outflow 81,960 93,748
Premiums are indicative and could vary for different insurers.
render all. Fincart suggests Amit take a
term plan of `2.7 crore at a cost of `2,330 a Surplus 12,182 394
month. For health insurance, the couple
has a `5 lakh cover by the employer. They
should also buy a `5 lakh family floater Write to us Looking for a professional to analyse your investment
portfolio? Write to us at etwealth@timesgroup.com with
plan and a `20 lakh top-up plan, which for expert ‘Family Finances’ as the subject. Our experts will study
your portfolio and offer objective advice on where and
will cost `1,662 a month. This should take
care of their insurance needs.
Financial plan by FINCART
advice how much you need to invest to reach your goals.
financial planning
The joy of being self-employed

Contractors in the informal sector are unwilling to go back to formal employment, says Uma Shashikant.
of people who did specific tasks for her, will-
ing to be paid as the mandates came in. She
shared and cared and they stuck with her.
Third, Ganga led from the front and was
always worked where needed, unquestion-
ingly. She chipped in to cut and prep when
hands were short; she slipped in to cook
when her cooks tired; she was willing to
make the umpteen trips to the bazaar for
materials. Many accused her of being a poor
delegator of tasks, and she often heard fam-
ily members accuse her of not “managing”
but “working”. But in her profession, seam-
lessness mattered and Ganga intuitively
knew that she could not develop too much
dependency on resources who have to exert
physically. She argued that her cook tiring
or her team member falling ill were normal
expected events in the business and she and
her team needed to be multi-skilled to fill in
as needed. As for her own strain, she always
said nothing healed like a good night’s sleep.
Fourth, Ganga leveraged on her
strengths. She was a great communicator
and cared for people. Customer service came
naturally to her. She was meticulous and
detail-oriented in how she ran her home.
GETTY IMAGES
Her business benefitted from her eye for de-
tail and ability to plan. She was able to scale
up and cater to weddings and expand her
services, leaning on her planning and execu-
tion skills. She identified suppliers, man-
E
conomists worldwide have been employed. She says she would be languishing aged costs tightly, outsourced where needed,
ringing alarm bells about how with a low pay, commuting tiring disances and built a profitable business model. She
more and more jobs are being han- and keeping odd hours. College students argues that being an employee would have
dled by contractors and service would beat her in skills and pay. She instead only offered a limited bouquet of repetitive,
providers, rather than employees. has a vast network of people she works with, menial tasks.
Many see this trend as one of exploitation, to whom she offers business and mandates Fifth, Ganga kept her ear to the ground.
with low wages, long hours, non-existent ben- and they in turn supply her goods and servic- She knew what the competition was offering;
efits and unstable incomes. However, many es. She would not trade this for a job, ever. she knew from her contract labourers how
contractors who have stepped in with their What lessons do Ganga’s journey hold? menus were changing; she understood from
teams to do jobs earlier assigned to employ- Why do people like her choose and persist customer conversations how trends were
UMA SHASHIK ANT
IS CHAIRPER SON, CENTRE
ees, have a different story to tell. with small scale informal enterprises? emerging. She refused to define her services
FOR INVES TMENT Surveys show only a small percentage of First, Ganga focused on her job description in terms of what she could do and instead fo-
EDUC ATION AND LE ARNING contractors who work in the informal seg- scripted by herself, not a remote manager, cused on what needs to be done to stay ahead.
ment, holding themselves responsible for the and invested herself completely into it. She The authority and respect she commands
monetisation of their labour, are willing to go began with her cooking skills, but constantly comes from the intelligence she has imbibed
back to formal employment. Many enjoy the kept learning the nuances of large scale cook- over the years, delivering for clients and
freedom, flexibility and growth their enter- ing from the many cooks who came to work earning tremendous good will. Most of her
prises offer them. The high personal stake is with her. She developed the capability to business comes from referrals and she likes
the very incentive to push themselves further cook, cater and deliver for large orders. She it that way. She is not sure if a job would have
in their chosen line of work. extended her services to manage events. She enabled such authority and expertise.
Surveys show only This week’s story is about Ganga and how did not allow the bothers of waking up at 2am When asked about the risks and uncer-
she built a business from scratch. When the and walking deserted streets to deter her. tainties of not having a steady income,
a small percentage
burden of supporting the family fell on her Whatever was needed to do a fine job, she was Ganga says without optimism, one cannot
of contractors
shoulders, she was a housewife in her mid- ready and willing to do. She does not believe a run a business. There have been enough
who work in the
thirties. She was an economics graduate with paid job can invoke such commitment. instances in her business when she has had
informal segment,
no work experience. She was rejected even in Second, she became a consummate man- to rework, redo, rethink and she sees such
holding themselves
simple job interviews. ager, leveraging on her people skills. Ganga risks as par for the course. She is confident
responsible for the Ganga decided to tap her skills as an ac- is soft-spoken, known for her kindness, and of finding a way. Since she does whatever she
monetisation of complished cook and turn it into a business keeps a cheerful demeanour despite severe is able and willing, she says she will remain
their labour, are venture. That was 18 years ago. She began odds. She brought together people she knew busy. In her view, the economists have got it
willing to go back to supplying home-cooked lunches at offices. and people with problems like her—the wrong as the tables have long turned against
formal employment. The learning curve was tough and steep, but neighborhood girl who had been orphaned employees seeking secure jobs in favour of
Ganga persisted. Today she is a recognised at a young age became her assistant; the auto the self-employed like herself.
name in her business, managing a team of driver who hauled her supplies became her
cooks and staff who not only cater food but Man Friday; skilled maids in the apartment
also manage large weddings and events. block she lived in became her contract work- Please send your feedback to
Ganga laughs at the suggestion of being ers; and soon enough she had built a network
financial planning
Job loss and home loans PAPER WORK

:: Monitoring mutual
fund investments
How does one tackle a home loan EMI when faced with retrenchment? Regular review of mutual fund
investments allows one to ascertain
if the investment has performed as
Amit took a `75 lakh home loan soon expected, whether the goal for which
after his marriage in 2010 to buy a it was made has been achieved, and
2-bedroom apartment. He earned whether any restructuring is required.
There are some mandatory public dis-
a good salary and met his EMI obi- closures made by funds that provide
ligations easily, that is till he got insights into their performance.
retrenched recently. The bank has
been unable to reach him after he Daily NAV
defaulted on his last EMI payment. Every fund house publishes
He is worried that the bank may the net asset value of each
now start harassing him. Will the scheme daily on its website
as well as on the AMFI website. To
bank initiate foreclosure and default ascertain the value of an investment,
proceedings if he misses 2-3 EMIs? one can use this NAV and multiply it
What are his options? with the number of units held.
A
mit must realise that just as he
wants a way out of this situation, it Monthly portfolio
is also not in the bank’s interest to Fund houses publish the
foreclose the loan. Banks are typi- portfolio of a scheme every
cally more interested in recovering month. The portfolio lists
the money than in starting legal proceedings as securities in which the scheme has
the process of attaching and auctioning a house invested in and their weightage. Fact
is lengthy and takes time. So, the bank will be sheets include portfolio and other
open to negotiations. The bank will typically scheme related information. This
not immediately repossess Amit’s house and information is vital to understand
would wait and watch before taking any legal risks in the portfolio.
action.
Given the shortage of funds, Amit’s concern
is the very high EMI. Even if he manages to find Consolidated Account
another job, he fears he may not be able to get Statement (CAS)
the same salary. In such a case, he can approach
An investor gets a CAS
the bank to restructure his loan. For example, monthly (if there were
assuming he currently pays `10,000 as EMI for a transactions in the previous
tenure of 20 years, the bank might offer him an month) or half yearly. This records
EMI of about `6,000, for 30 years. So his EMI will all transactions and the value of the
go down, giving him some breathing room and investment on the given date.
the bank will not lose money either—a win-win
situation. Such a restructure under stress may
eventually cost him more in terms of total mon- Key changes to fund
ey repaid, but he must realise that this arrange- Sometimes, key attributes of
ment will give him the much-needed breathing a scheme changes. An email
space, which is his current priority. is typically sent to investors
Amit might also ask for deferral of payments. informing them about it. Such
The bank may grant relief, considering his changes may have an impact on the
past payment history and genuineness of the scheme performance and should be
GETTY IMAGES
problem. He could also use the funds received evaluated. For many such changes,
as severance package to prepay a part of his Sebi makes it mandatory for fund
loan, which will lower his EMI. Continuing to houses to provide an exit option.
remain a defaulter and not contacting the bank
can only make his relationship with the bank, The content on this page is courtesy Centre for Investment Education and Learning (CIEL).
and his credit scores, worse. Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. Using tracking websites
One can find out how a
scheme has fared compared
to similar ones in its peer
smart things to know Recession group. This information can be found

on aggregator websites. One can
upload investment details and get a
Monetary snapshot of scheme performance.
1
2
Recession is In this authorities have
4
a phase in phase, infla- space to reduce
the economic
cycle of any
tion stays
pushed
interest rates, so
liquidity eases
::Points to note
•While it is important to track one’s
economy It may be triggered down, but and investment
3 5
investments, it is worthwhile to
when there is due to a financial so does In a low inflation, low growth is incentivised. If consult an expert. An investment
a decline in crisis or an external demand. environment there is an other economic adviser can advise, monitor and
GDP, income, trade shock, an As a result, expectation that rates will conditions are critically review the portfolio and
employment, adverse supply shock both growth be cut, which pushes up conducive, a suggest changes if needed.
manufacturing or the bursting of an and inflation bond prices. Bonds typically recovery may
and sales. economic bubble. are poor. outperform other asset classes. start.
career strategy
THE
Your GROWTH
MINDSET
future is 1 IT’S ABOUT
CHANGE
Carol Dweck’s popular study
at risk
How fast you can evolve decides
on growth mindset says the
brain is plastic or that it is
capable of continuous growth
and change. So, if you possess a
fixed mindset and like to believe
that intelligence or talents are a
your future at work, says limited commodity, it’s obvious
that you will avoid change or
Devashish Chakravarty. new learnings and thus make
yourself redundant faster.
GETTY IMAGES
ACQUIRING SKILLS
2 From a growth mindset,
you can accept that any
skill can be learnt. However,
learning requires good inputs
T
he future of your career is at past skills and knowledge and learn the In a future that will become unfavourable and exposure, correct methods
risk. Your education, current missing stuff required for that job. Your for specialists, it will be increasingly chal- and habits and a lot of effort
skill-set and work experience critical question is – how quickly can you lenging to have continuous growth as an and discomfort. Seek them out
are rapidly diminishing in learn each time? individual contributor. Whether you are a because if any one of the three
value each year. Every year strong individual contributor or not, you is missing, chances are that you
more jobs are being eliminated or reduced Knowledge vs application will do well if you are known to be an effec- are progressing slowly or not
in scope due to business challenges and From the bleak future for specialists, you tive team player. Firstly, working in a con- at all.
rapid advances in technology and automa- can figure out that knowledge is no more nected team ensures that you have a steady
tion. Sooner or later, you will be impacted. the barrier that protects your career. Your stream of information and inputs through HOW YOU SPEAK
All is not lost though. Simultaneously, the current knowledge base has a limited shelf team interactions that keeps you updated. 3 A growth mindset
Internet is continuously creating innumer- life and will result in reducing income Secondly, with increased automation, changes how you speak. Is
able new career opportunities—unrestrict- each year. Also, knowledge is nearly freely simple problems cease to exist and complex your conversation about the
ed by current access to knowledge and available for anyone who wants to replace ones are beyond the scope of any individu- impossible hurdles and negative
skills, time and bandwidth constraints, you. Your primary value to the world is al. Thus, new teams will continue to be cre- circumstances you faced? Or
physical distance from a potential em- your ability to deliver outcomes which is ated in organisations and adequately budg- about the interesting challenges
ployer or income opportunity and ability powered by your ability to correctly put eted to bring together people from different and creative solutions that you
to reach out and connect with decision some knowledge to good use. How can backgrounds to find solutions together. look forward to? What words do
makers. So how do you recreate yourself your strengthen your application muscle? Being uncomfortable in a collaborative set- you use and what beliefs and
to be constantly valuable in a future that is Firstly, each time you will only use a part up will make you unsuitable for leadership mindsets trigger them? Change
unpredictable and scary? of the knowledge you possess. Thus, mak- roles and often mark you out as a burden on your conversations to trigger
ing a habit of continuously learning will the team despite your abilities. belief and mindset change.
Generalist vs specialist increase your cumulative knowledge and
You have been taught that specialists are thus your chances of finding a suitable ap- New frames vs existing frames WAIT FOR SUCCESS
irreplaceable and hence being one makes
sure that you earn well. Think again.
plication for a problem. Secondly, you must
be willing to spend time to think. In a world
Finally, since continuous and quick
learning is critical for survival, you will
4 There is no concept of
failure in a growth mindset.
So, you trained to be an accountant and crammed with continuous distractions master the process of learning. Begin
Not achieving a goal today is
have specialised in audit matters. You are from your phone, emails and entertain- with “Un-learning”. Maybe, you are a
simply a function of skills and
clearly a specialist. Your typical work-day ment options, you may be spending little coder-engineer. You are trained to think
thus time. You haven’t failed but
10 years hence will be nowhere similar to time in thinking about what new can work mathematically, incrementally and
rather you haven’t achieved it
what you are doing today. Regulations, tax- and what can’t. The more you think about rationally. Maybe you can’t figure out what
yet. Remember your past wins,
es and case laws – all would have changed. complex problems and potential solutions, skills does the HR team bring to the table
where you put in effort, took
Your clients and you will not be able to the better you get at this game. Finally, be or how is the salesperson able to sell the
the time, got back into the game
audit without advanced digital account- ready to step out of your comfort zone to try product though he knows so little about it.
and succeeded. You can only
ing and audit tools that would have been implementing your thoughts even though Once you accept your lack of knowledge
grow from here onwards.
developed and integrated with regulatory it is comfortable to simply continue in the and choose to learn more about people
authorities, vendors and customers. As a old way of doing things. Only after this last skills, recognise that you cannot approach
JUST A PROCESS
specialist with your current skill sets, you
will soon become redundant and replaced
step, have you applied your knowledge.
This is not easy, because your ideas and
communication and storytelling from
an engineering perspective. Only if you
5 The best part is that a
by a new batch of younger people who are execution will not work perfectly every are willing to drop your existing mental growth mindset is simply a
trained for the changed world. Your only time and you will fall and fail often. Are frames and begin learning from scratch to process you can adopt. Firstly,
hope at being extremely valuable as a spe- you willing to embrace being embarrassed build a new set of thinking structures and reward and praise yourself
cialist lies in continuous upgradation of or are you locked up in the habit of always frameworks can you learn fast enough to be for putting in structured hard
skills at the same pace as the new crop. Are wanting to look Instagram-good? continuously useful. work towards goals that are
you spending 5-10 hours a week on your challenging but not impossible.
own learning? Consider that the future Team vs contributor Secondly, celebrate and be
belongs to the generalist. You are someone That brings you to the next question – are grateful whether the goal is
who constantly exposes herself to different you better off as an individual contributor THE WRITER IS FOUNDER achieved or not because either
AND CEO AT QUEZX.COM will teach you something new.
responsibilities and is willing to rapidly or as an integral part of a team where indi-
AND HEADHONCHOS.COM.
pivot to new roles, integrate a variety of vidually you may have little or no value?
SMART STATS
The Economic Times Wealth
September 2-8, 2019
In This Section
MUTUAL FUNDS - P22
LOANS AND DEPOSITS - P24
ET WEALTH TOP 50 STOCKS

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result
of this is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.
RANK PRICE ` GROWTH%* VA LUAT I O N R AT I O S RISK R AT I N G
Current Previous Stock Net Div Downside Bear No. of Consensus
Rank Rank Price Revenue Profit PE PB Yield PEG Risk Beta Analysts Rating
Apar Industries 1 1 533.95 19.00 47.00 15.02 1.70 1.72 0.32 1.08 0.71 10 4.90
1 Fast growing stocks
KEC International 2 4 244.00 23.00 27.00 12.90 2.58 1.11 0.48 1.49 0.94 30 4.70
Top 5 stocks with the highest
Capacit'e Infraprojects 3 3 194.45 30.00 40.00 13.81 1.57 0.51 0.33 1.83 0.99 11 4.82
expected revenue % growth
JK Cement 4 5 1054.40 19.00 61.00 28.78 3.03 0.95 0.35 1.01 0.71 22 4.64 over the previous year
HG Infra Engineering 5 6 201.15 32.00 37.00 10.29 1.98 0.25 0.27 2.09 0.67 13 5.00 Sterlite
Technologies 39
Aurobindo Pharma 6 8 591.10 30.00 25.00 14.65 2.49 0.42 0.57 1.43 1.14 36 4.64
Gujarat Gas 7 10 177.10 33.00 73.00 29.13 5.53 0.45 0.43 1.33 0.78 27 4.59 Gujarat Gas 33
JSW Energy 8 43 67.05 31.00 36.00 15.81 0.93 1.49 0.43 1.40 1.14 17 3.12 HG Infra
32
Engineering
DB Corp 9 11 135.85 5.00 26.00 8.87 1.30 8.06 0.28 1.28 1.12 16 4.19
JSW Energy 31
BHEL 10 15 50.60 10.00 38.00 18.20 0.57 3.54 0.39 1.80 1.32 34 3.00
PI Industries 31
Star Cement 11 9 95.75 24.00 27.00 15.74 3.83 1.02 0.48 1.40 0.79 11 4.64
Zensar Technologies 12 12 221.75 19.00 23.00 3.17 2.56 1.29 0.15 1.73 1.34 16 4.63
NTPC 13 16 123.10 17.00 6.00 8.03 1.11 4.57 1.02 1.07 0.83 27 4.85
2 Least expensive stocks
PGCIL 14 20 204.80 10.00 13.00 8.53 1.81 4.05 0.61 1.00 0.62 29 4.28
Top 5 stocks with the lowest
Parag Milk Foods 15 17 138.95 22.00 23.00 9.66 1.41 0.54 0.45 1.70 0.82 15 4.40 price-earnings ratio
Ipca Laboratories 16 30 938.80 21.00 40.00 26.66 3.80 0.32 0.66 1.17 0.63 26 4.42
Zensar
Technologies 3.17
Oberoi Realty 17 13 549.50 21.00 45.00 24.46 2.49 0.37 0.50 1.69 1.11 25 4.12
Jagran
Engineers India 18 14 105.90 25.00 23.00 18.10 2.85 4.56 0.98 1.67 0.69 17 4.35 Prakashan
6.94
Allcargo Logistics 19 23 90.65 14.00 14.00 9.20 1.11 3.80 0.46 1.37 0.88 10 4.70 NTPC 8.03
Century Plyboards 20 22 132.85 14.00 41.00 19.89 3.03 0.75 0.48 1.76 1.03 19 4.53 Sterlite
Technologies 8.08
Jagran Prakashan 21 26 64.15 6.00 20.00 6.94 1.01 4.70 0.34 1.58 0.84 14 4.36
Redington
Redington India 22 21 109.90 15.00 15.00 8.52 1.09 3.01 0.58 1.86 0.40 10 4.70 India 8.52
Alkem Laboratories 23 28 1817.75 17.00 37.00 28.53 3.99 0.87 0.79 0.85 -0.11 17 4.59
Rallis India 24 27 154.10 17.00 27.00 19.35 2.34 1.60 0.73 1.13 0.34 20 3.80
3 Best PEGs
Sterlite Technologies 25 18 114.55 39.00 18.00 8.08 2.68 2.86 0.49 2.35 1.38 12 4.42
Top 5 stocks with the least
CCL Products India 26 34 238.10 24.00 25.00 20.41 3.77 0.72 0.82 1.02 0.33 11 4.73 price-earnings to growth ratio
UltraTech Cement 27 24 4073.90 25.00 76.00 45.92 3.94 0.28 0.64 1.28 1.27 39 4.03 HG Infra Info Edge India
Engineering
Ahluwalia Contracts 28 35 305.05 20.00 29.00 17.49 2.79 0.10 0.59 1.47 0.94 16 4.81
Emami 29 29 296.55 14.00 86.00 44.39 6.48 1.33 0.54 1.45 1.08 33 4.30
0.15 0.27 0.28 0.31 0.32
Sun Pharma Ind 30 31 434.65 20.00 43.00 39.16 2.52 0.67 0.93 1.70 1.13 43 3.54
Narayana Hrudayalaya 31 33 233.40 20.00 127.00 79.49 4.35 0.43 0.64 1.34 0.40 11 5.00
Zensar DB Corp Apar Industries
Larsen & Toubro 32 36 1342.45 19.00 17.00 21.14 3.02 1.34 1.28 0.97 0.93 39 4.61 Technologies
Lupin 33 41 735.05 14.00 69.00 54.81 2.42 0.68 0.79 1.21 0.95 46 2.87
4 Income generators
VA Tech Wabag 34 37 276.80 22.00 23.00 14.44 1.42 1.42 0.67 1.80 1.70 15 3.93
Info Edge India 35 39 2002.40 26.00 95.00 40.43 9.61 0.26 0.31 1.64 0.30 29 3.52 Top 5 stocks with the highest
dividend yield (%)
HeidelbergCement 36 38 197.85 12.00 37.00 20.25 3.82 1.75 0.54 1.60 1.58 15 4.47
Reliance Industries 37 44 1241.75 9.00 26.00 18.58 1.90 0.51 0.76 1.25 0.99 36 4.28 DB Corp 8.06
Jagran 4.70
Hexaware Technologies 38 46 387.50 24.00 21.00 19.69 4.55 2.33 1.09 1.35 0.46 28 3.79 Prakashan
Jubilant Life Sciences 39 42 428.00 8.00 23.00 11.87 1.42 0.72 0.50 1.64 1.52 13 4.77 Ashok Leyland 4.64
NTPC 4.57
PI Industries 40 -- 1100.25 31.00 38.00 37.00 6.65 0.45 0.96 1.14 0.78 24 4.08
Engineers India 4.56
Ashok Leyland 41 40 65.75 17.00 11.00 9.29 2.21 4.64 0.84 1.72 1.25 49 3.24
Motherson Sumi Systems 42 47 96.95 15.00 22.00 18.97 2.79 1.54 0.92 1.91 1.48 33 4.33
5 Least risky
NBCC India 43 19 36.65 23.00 30.00 17.62 4.37 1.56 0.59 2.28 2.22 14 4.07
Top 5 stocks with the lowest
Mahanagar Gas 44 -- 846.25 7.00 16.00 15.30 3.48 2.40 0.98 1.08 0.66 27 4.48 downside risk
Cipla 45 50 465.20 13.00 26.00 24.48 2.49 0.65 0.97 1.08 0.66 42 3.57 Larsen &
Toubro JK Cement
Adani Ports & SEZ 46 -- 366.20 19.00 24.00 19.00 3.11 0.05 0.75 1.62 1.66 24 4.75
Mphasis 47 -- 968.00 18.00 11.00 17.29 3.44 2.76 1.26 1.24 1.02 32 4.34
0.85 0.97 1.00 1.01 1.02
Thermax 48 -- 1008.60 10.00 55.00 34.91 3.99 0.69 0.70 1.19 0.69 32 2.78
Kajaria Ceramics 49 -- 469.95 18.00 32.00 32.98 4.74 0.64 0.95 1.53 0.96 31 3.97
Alkem PGCIL CCL Products
Crompton Greaves Cons 50 -- 225.95 20.00 24.00 35.30 12.91 0.88 1.54 1.34 0.51 36 4.58 Laboratories India
SEE DOWNSIDE RISK AND BEAR BETA COLUMNS

*REVENUE AND NET PROFIT GROWTH IS BASED ON CONSENSUS ANALYSTS' EXPECTATIONS. NR: NOT IN THE RANKING. DATA AS ON 14 AUG 2019. SOURCE: BLOOMBERG IN THE ADJACENT TABLE.
smart stats
ETW FUNDS 100

BEST FUNDS TO BUILD YOUR PORTFOLIO
LAGGARDS & LEADERS
Taking a long-term view of fund returns, here is a list of 10
funds in each category—five leaders (worth investing) and
five laggards (that may be a drag on your portfolio).
LAGGARDS LEADERS
ET Wealth collaborates with Value Research to identify the top-performing Equity: Large-cap 5-year returns
funds across categories. Equity funds and equity-oriented hybrid funds are
3.51 11.79
ranked on 3-year returns while debt-oriented hybrid and income funds are Principal Nifty 100 Equal Weight Mirae Asset Large Cap Fund
ranked on 1-year returns. 5.18 10.97
Taurus Largecap Equity Quant Focused Fund
RETURNS (%)
Value Research Net Assets Expense
Fund Rating (` Cr) 3-Month 6-Month 1-Year 3-Year 5-Year Ratio (%) 5.3 10.74
Baroda Large Cap Axis Bluechip Fund
EQUITY: LARGE-CAP 13% 5.88 10.03
Axis Bluechip Fund  6500.66 -1.35 8.81 0.1 12.95 10.74 2.02 THE 3-YEAR IDFC Large Cap JM Core 11 Fund
Sundaram Select Focus Fund  975.66 -4.91 6.78 -3.58 11.2 8.15 2.48 RETURN
OF AXIS
5.94 9.8
Mirae Asset Large Cap Fund  13491.69 -6.22 3.34 -3.63 10.97 11.79 1.7
BLUECHIP IS DSP Top 100 Equity Reliance ETF Junior BeES
Canara Robeco Bluechip Equity Fund  211.7 -4.94 4.76 -4.3 9.2 8.62 2.72 THE HIGHEST
HDFC Top 100 Fund  17094.91 -10.19 1.85 -4.28 8.89 7.57 1.78 IN ITS
CATEGORY.
ICICI Prudential Bluechip Fund
Edelweiss Large Cap Fund


21124.93
157.99
-7.23
-5.44
1.51
3.87
-6.69
-7.88
8.45
8.44
8.69
9.03
1.83
2
Equity: Multi-cap 5-year returns
Motilal Oswal Focused 25 Fund  1044.66 -4.73 6.99 -5.52 8.19 9.59 2.25
Reliance Large Cap Fund  12260.85 -13.67 -2.22 -8.48 8.11 9.01 1.86
4.21 15.08
LIC MF Multicap Fund Motilal Oswal Multicap 35 Fund
JM Core 11 Fund  47.93 -7.32 -1.32 -9.97 7.33 10.03 —
SBI Bluechip Fund  21584.91 -7.15 4.68 -5.12 6.16 9.59 2 4.49 12.48
Taurus Starshare (Multi Cap) Axis Focused 25 Fund
EQUITY: LARGE- & MID-CAP 11.9% 4.73 12.1
Mirae Asset Emerging Bluechip Fund  7498.56 -6.01 4.51 -2.54 11.87 17.18 1.79 THE 3-YEAR
RETURN OF HDFC Focused 30 Kotak Standard Multicap Fund
Sundaram Large and Mid Cap Fund  694.86 -7.38 1.79 -9.37 10.4 10.91 2.65
MIRAE ASSET 4.76 11.97
Invesco India Growth Opportunities Fund  1559.94 -4.64 2.33 -8.72 9.74 10.7 2.18
EMERGING
LIC MF Large & Mid Cap Fund  490.57 -3.01 4.54 -8.43 9.12 — 2.77 BLUECHIP IS
Union Multi Cap SBI Magnum Multicap Fund
Kotak Equity Opportunities Fund  2466.93 -6.94 2.97 -4.54 7.9 10.57 2.1 THE HIGHEST 5.26 11.72
Canara Robeco Emerging Equities Fund  4640.03 -10.5 -1.91 -13 7.83 13.33 1.93 IN ITS
IDFC Focused Equity Tata Retirement Savings Fund
Principal Emerging Bluechip Fund  2051.44 -9.14 -1.29 -14.56 5.88 12.19 2.1 CATEGORY.
EQUITY: MULTI-CAP
Axis Focused 25 Fund  7784.89 -3 6.68 -7.98 12.01 12.48 2.03 Equity: Mid-cap 3-year returns
Parag Parikh Long Term Equity Fund  2003.99 -2.34 1.46 -4.63 10.17 11.18 2.08
Tata Retirement Savings Fund  624.72 -5.61 3.49 -9.13 9.72 11.72 2.47
-1.7 9.63
Edelweiss Multi Cap Fund  394.58 -8.04 1.83 -7.76 9.68 — 2.44
SBI Magnum Midcap Fund Axis Midcap Fund
Kotak Standard Multicap Fund  24958.63 -7.72 4.14 -4.78 9.46 12.1 1.73
SBI Focused Equity Fund  4984.06 -7.54 4.77 -3.42 9.46 11.47 2.11 -0.78 6.18
Motilal Oswal Multicap 35 Fund  12413.26 -5.82 3.68 -8.46 8.53 15.08 1.76 PGIM India Midcap Opportunities L&T Midcap Fund
SBI Magnum Multicap Fund  7465.19 -6.99 5.05 -4.12 8.15 11.97 2.13
0.25 5.88
Quant Active Fund  6.39 -9.8 1.17 -8.96 7.8 9.85 2.48
UTI Mid Cap Fund Tata Midcap Growth Fund
HDFC Retirement Savings Fund  710.97 -7.57 0.44 -6.07 7.41 — 2.34
Franklin India Focused Equity Fund  8182.84 -11.93 1.72 -4.97 6.67 9.67 1.8 0.41 5.77
Aditya Birla Sun Life Equity Fund  10694.26 -9.17 -0.24 -9.79 6.36 10.04 1.93 Aditya Birla Sun Life Mid Cap Invesco India Mid Cap Fund
ICICI Prudential Multicap Fund  3939.96 -9.79 -1.1 -9.6 5.75 9.15 2.15 0.85 5.62
EQUITY: MID-CAP 9.6% Motilal Oswal Midcap 100 Reliance Growth Fund
Exchange Traded
Axis Midcap Fund  2634.45 -3.35 1.09 -7.26 9.63 10.99 2.18 THE 3-YEAR
L&T Midcap Fund  4805.3 -10.59 -4.29 -16.78 6.18 11.63 2.01 RETURN OF
DSP Midcap Fund  5856.41 -6.97 -0.34 -9.75 5.52 11.7 1.99 AXIS MID-
CAP FUND IS
Equity: Small-cap 3-year returns
Kotak Emerging Equity Scheme  4320.94 -8.3 -0.49 -10.75 5 12.16 2
THE HIGH-
Franklin India Prima Fund  6686.24 -8.53 -2.47 -11.59 4.15 10.81 1.82 EST IN ITS -7.52 10.93
HDFC Mid-Cap Opportunities Fund  20893.16 -10.75 -3.32 -16.04 3.49 9.91 1.71 CATEGORY.
Quant Small Cap Fund SBI Small Cap Fund
EQUITY: SMALL-CAP -3.05 9.09
SBI Small Cap Fund  2255.49 -7.43 2.78 -12.89 10.93 17.34 2.34 Sundaram Small Cap Fund Axis Small Cap Fund
Axis Small Cap Fund  517.06 0.28 10.62 2.95 9.09 12.5 2.65
-2.43 7.74
HDFC Small Cap Fund  7894.01 -15.23 -7.88 -17.25 7.74 11.01 1.85
Union Small Cap Fund HDFC Small Cap Fund
L&T Emerging Businesses Fund  5611.4 -12.26 -7.76 -20.59 7.2 12.08 2.02
Reliance Small Cap Fund  7541.96 -14.97 -5.41 -20.58 6.72 11.49 2.03 -1.49 7.2
Franklin India Smaller Companies Fund  6728.84 -14.83 -6.2 -19.26 0.21 8.38 1.78 Aditya Birla Sun Life Small Cap Fund L&T Emerging Businesses Fund
-1.22 6.72
EQUITY: VALUE-ORIENTED
DSP Small Cap Fund Reliance Small Cap Fund
Kotak India EQ Contra Fund  811.32 -5.88 2.36 -6.55 10.67 9.66 2.48
Invesco India Contra Fund  3879.63 -8.88 -0.27 -11 9.41 11.18 2.01
Tata Equity PE Fund  5174.9 -6.21 1.36 -11.52 7.89 11.32 1.9
L&T India Value Fund  7715.53 -9.76 0.53 -11.78 6.43 11.26 1.87 Hybrid: Aggressive 5-year returns
EQUITY: TAX-SAVING 13.6% 1.65 11.53
Mirae Asset Tax Saver Fund  2207.96 -5.54 4.17 -3.46 13.56 — 1.9
THE 3-YEAR JM Equity Hybrid Fund Tata Retirement Savings Fund
Axis Long Term Equity Fund  18952.64 -2.71 6.7 -4.64 10.29 11.93 1.76
RETURN OF
JM Tax Gain Fund  30.1 -4.64 5.18 -4.88 9.75 10.61 — MIRAE ASSET 5.31 10.43
Motilal Oswal Long Term Equity Fund  1339.11 -4.06 3.61 -9.45 9.3 — 2.15 TAX SAVER LIC MF Equity Hybrid Fund SBI Equity Hybrid Fund
Tata India Tax Savings Fund  1807.2 -6.68 4.66 -4.54 8.46 12.12 2.13 FUND IS THE
HIGHEST IN
5.53 9.75
Invesco India Tax Plan  837.23 -5.9 2.33 -9.86 8.06 10.23 2.42
Kotak Tax Saver  895.57 -8.23 3.04 -4.52 8.05 10.56 2.41 ITS CATEGORY. PGIM India Hybrid Equity Fund Canara Robeco Equity Hybrid Fund
DSP Tax Saver Fund  5433.86 -6.06 5.64 -3.87 7.85 10.66 1.9 5.82 9.63
IDFC Tax Advantage (ELSS) Fund  1902.13 -12.99 -2.09 -13.63 7.08 9.23 2.02 Baroda Hybrid Equity Fund HDFC Hybrid Equity Fund
Aditya Birla Sun Life Tax Relief 96  8416.36 -9.59 -4.16 -14.39 6.92 10.75 2.04
6.4 9.59
Quant Tax Plan  9.53 -10.35 0.76 -10.6 5.41 12.49 2.48
Shriram Hybrid Equity Fund HDFC Children's Gift Fund
ANNUALISED RETURNS IN % AS ON 28 AUGUST 2019.
smart stats
ETW FUNDS 100 Top 5 SIPs

Value Research
Fund Rating
Net Assets
(` Cr) 3-Month 6-Month
RETURNS (%)
1-Year 3-Year 5-Year
Expense
Ratio 1 Top 5 equity schemes based
HYBRID: EQUITY SAVINGS 7% on 10-year SIP returns
Kotak Equity Savings Fund - Regular Plan  2003.19 -0.81 2.48 1.93 7.04 — 2.16 THE 3-YEAR
Edelweiss Equity Savings Fund - Regular Plan  118.71 -0.73 3.21 1.29 6.92 — 1.74 RETURN OF Canara Robeco Emerging Equities Fund
KOTAK EQ-
HDFC Equity Savings Fund  5137.58 -3.21 2.33 0.88 6.92 7.58 1.93
UITY SAVINGS 17.31
ICICI Prudential Equity Savings Fund  1617.39 -0.36 4.43 5.94 6.62 — 1.35 FUND IS THE Principal Emerging Bluechip Fund
HIGHEST IN
HYBRID: AGGRESSIVE (EQUITY-ORIENTED) ITS CATEGORY. 14.88
Mirae Asset Hybrid Equity Fund - Regular Plan  2297.13 -4.4 3.85 -0.23 9.68 — 2.01 SBI Focused Equity Fund
SBI Equity Hybrid Fund  29407.69 -3.19 6.25 1.89 8.77 10.43 1.66
14.73
HDFC Retirement Savings Fund - Hybrid Equity  305.8 -5.7 2.08 -2.42 8.6 — 2.44
Principal Hybrid Equity Fund  1600 -8.08 -1.91 -8.5 8.37 9.41 2.14 Mirae Asset Large Cap Fund
Tata Retirement Savings Fund - Moderate Plan  1048.85 -6.67 1.34 -8.19 8.37 11.53 2.27
14.40
HDFC Children's Gift Fund  2735.32 -4.59 1.82 -3.06 8.03 9.59 2.14
Canara Robeco Equity Hybrid Fund - Regular Plan  2298.03 -4.87 2.82 -1.76 7.93 9.75 2.15
Franklin India Prima Fund
HDFC Hybrid Equity Fund  21150.85 -5.9 2.78 -2.15 7.6 9.63 1.72 14.36
ICICI Prudential Equity & Debt Fund  24315.87 -7.5 1.14 -3.33 7.08 9.37 1.72
SIP: SYSTEMATIC % ANNUALISED RETURNS
INVESTMENT PLAN AS ON 28 AUGUST 2019
HYBRID: CONSERVATIVE (DEBT-ORIENTED)
ICICI Prudential Regular Savings Fund  1642.45 0.08 4.04 6.15 7.93 9.63 1.96 6.2%
Top 5 MIPs
HDFC Retirement Savings Fund - Hybrid Debt Plan
Indiabulls Savings Income Fund - Regular Plan
Tata Retirement Savings Fund - Conservative Plan



67.25
20.13
130.98
0.04
-1.34
-0.36
4.16
3.14
4.01
4.58
3.36
2.61
6.48
8.32
6.5
—
—
8.35
2.14
2.22
2.23
THE 1-YEAR
RETURN OF
ICICI PRU REG-
2 Top 5 MIP schemes based on
ULAR SAVINGS
Aditya Birla Sun Life Regular Savings Fund  2059.74 -0.86 3.52 -0.11 5.04 9.03 1.82 FUND IS THE 3-year SWP returns
SBI Magnum Children's Benefit Fund  62.28 -2.35 0.79 -1.5 8.3 10.45 2.26 HIGHEST IN ITS
CATEGORY. Indiabulls Savings Income Fund
UTI Regular Savings Fund - Regular Plan  2412.37 -3.22 -0.24 -1.61 5.2 7.58 1.79
8.11
DEBT: MEDIUM- TO LONG-TERM
ICICI Prudential Regular Savings Fund
SBI Magnum Income Fund  1206 3.5 7.28 10.54 7.65 8.88 1.47
7.62
DEBT: MEDIUM-TERM Baroda Conservative Hybrid Fund
SBI Magnum Medium Duration Fund  1752.79 3.37 6.76 10.59 8.82 9.4 1.09
Axis Strategic Bond Fund  1189.22 0.47 3.37 7.21 7.32 8.86 1.05
7.00
Franklin India Income Opportunities Fund  3613.81 1.65 3.28 7.07 8.04 8.6 1.7 BNP Paribas Conservative Hybrid Fund
UTI Medium Term Fund - Regular Plan  311.98 1.84 3.88 6.52 6.83 — 1.61 5.73
DEBT: SHORT-TERM 9.9% Canara Robeco Conservative Hybrid Fund
Axis Short Term Fund  2053.61 2.98 5.81 9.89 7.51 8.2 0.9 THE 1-YEAR 5.62
HDFC Short Term Debt Fund  8172.68 2.92 5.51 9.67 7.75 8.42 0.4 RETURN OF
SWP: SYSTEMATIC % ANNUALISED RETURNS
Baroda Short Term Bond Fund  335.33 2.65 5.23 9.13 8.05 8.48 1.29 AXIS SHORT
WITHDRAWAL PLAN AS ON 28 AUGUST 2019
TERM FUND
Indiabulls Short Term Fund - Regular Plan  104.14 1.27 3.92 7.88 7.09 7.97 1.48
IS THE HIGH-
Franklin India Short Term Income Plan - Retail Plan  13274.38 1.02 3 7.82 8.3 8.7 1.48 EST IN ITS
BNP Paribas Short Term Fund  120.29 0.63 3.21 6.88 6.64 7.61 1.19 CATEGORY.
DEBT: DYNAMIC BOND 3 Small Cap cash holdings

SBI Dynamic Bond Fund  1083.34 5.45 10.18 14.46 8.33 9.62 1.65
PGIM India Dynamic Bond Fund  40.87 4.35 8.38 13.6 8.65 9.83 1.28 21.88
Kotak Dynamic Bond Fund - Regular Plan  736.57 3.75 7.45 12.82 8.5 9.32 1.08
Quantum Dynamic Bond Fund - Regular Plan  59.25 4.25 7.97 12.07 8.01 — 0.71
17.25
ICICI Prudential All Seasons Bond Fund  2791.26 3.1 6.65 10.15 7.94 9.99 1.3
Franklin India Dynamic Accrual Fund  3960.08 1.23 3.44 8.33 8.33 9.42 1.67
9.23 9.04 8.68
DEBT: CORPORATE BOND
HDFC Corporate Bond Fund  12415.57 3.36 6.75 11.17 8.1 8.88 0.46
Aditya Birla Sun Life Corporate Bond Fund  15967.81 2.9 5.82 10.49 7.97 8.8 0.39 Expense as on 31 July 2019
Returns as on 28 August 2019
Franklin India Corporate Debt Fund  951.37 3.53 5.82 10.4 8.54 9 0.89
Assets as on 31 July 2019
Kotak Corporate Bond Fund - Standard Plan  2333.65 2.7 5.46 9.78 8.14 9.35 0.59 Principal Tata Small IDBI HSBC L&T
Rating as on 31 July 2019
Reliance Prime Debt Fund  1142.79 1.77 4.14 8.17 7.31 8.03 0.71 Small Cap Cap Fund Small Small Cap Emerging
All equity funds ranked on 3-year returns. Debt funds ranked on 1-year returns.
Fund Cap Equity Businesses
Did not find your fund here? % AS ON 31 JULY 2019
Log on to www.wealth.economictimes.com for an exhaustive list.
Methodology EQUITIES (figures over the past one year)

The Top 100 includes only those funds that have a 5- or
4-star rating from Value Research. The rating is determined
by subtracting a fund’s risk score from its return score.
Large-cap: Mostly invested in large-cap companies.
Multi-cap: Mostly invested in large- and mid-cap FUND 4 Debt: Short duration
companies.
The result is assigned stars according to the following
distribution: Mid-cap: Mostly invested in mid-cap companies. RAISER 0.73
0.77 0.79
  Top 10% Small-cap: Mostly invested in small-cap companies.
35%
  Next 22.5% Tax planning: Offer tax rebate under Section 80C. 0.48
(Not covered
  Middle 35% in ETW Funds International: More than 65% of assets invested abroad. 0.40
  Next 22.5% 100 listing) Income: Average maturity varies according to objective.
  Bottom 10% Gilt: Medium- and long-term; invest in gilt securities.
Of the total industry
Fixed-income funds less than 18 months old and equity funds Equity-oriented: Average equity exposure more
less than three years old have been excluded. This ensures than 60%. equity AUM belonged
that all the funds have existed long enough to be tracked for Debt-oriented aggressive: Average equity exposure to the top 10 largest*
consistency of performance. Given the focus on long-term between 25-60%. HDFC IDFC All L&T UTI Short IDFC Bond
investing, liquid funds, short-term funds and FMPs are not stocks of the Nifty-50 Short Seasons Short Term Fund
part of the list. For the same reason, we have considered only Debt-oriented conservative: Average equity exposure Income Short
less than 25%. index in July 2019 Term Debt Bond Term
the growth option of funds that reinvest returns instead of Bond Term Plan
offering dividends that increase the NAV of funds. Arbitrage: Seek arbitrage opportunities between equity *In terms of market cap
Despite these rigorous filters, the list includes 2/3 funds of and derivatives. % AS ON 31 JUL 2019
% EXPENSE RATIO IS CHARGED ANNUALLY.
each category to maximise choice from the best funds. Asset allocation: Invest fully in equity or debt as per METHODOLOGY OF TOP 100 FUNDS ON
The fund categories are: market conditions. WWW.WEALTH.ECONOMICTIMES.COM
loans and deposits
LOANS & DEPOSITS

ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.
Top five bank FDs

TENURE: 1 YEAR
IDFC First Bank
Interest rate (%)
compounded qtrly
8.00
What `10,000
will grow to
10,824
BANK Top banks for 2 years
BANK NAME MCLR (%) WITH EFFECT FROM
Lakshmi Vilas Bank
RBL Bank
Indusind Bank
7.75
7.70
7.50
10,798
10,793
10,771
MCLR State Bank Of India
IOB
8.35
8.60
10 August 2019
10 August 2019
Bandhan Bank 7.35 10,756 Axis Bank 8.65 17 AUGUST 2019
TENURE: 2 YEARS Marginal Cost of funds-based Lending
Rate (MCLR) is the new benchmark lending HDFC Bank 8.70 8 August 2019
IDFC First Bank 8.00 11,717
AU Small Finance Bank 7.87 11,687 rate designated by RBI and will replace the Kotak Mahindra Bank 8.80 16 August 2019
Lakshmi Vilas Bank 7.85 11,682 base rate for new borrowers.
RBL Bank 7.75 11,659
Bandhan Bank 7.65 11,636
TENURE: 3 YEARS
Top banks for 6 months Top banks for 3 years
DCB Bank 8.00 12,682 BANK NAME MCLR (%) WITH EFFECT FROM BANK NAME MCLR (%) WITH EFFECT FROM
AU Small Finance Bank 8.00 12,682
Lakshmi Vilas Bank 7.85 12,627 State Bank Of India 8.10 10 AUGUST 2019 State Bank Of India 8.45 10 August 2019
Bandhan Bank 7.65 12,552 Central Bank Of India 8.20 15 AUGUST 2019 Punjab National Bank 8.50 1 August 2019
Punjab National Bank 8.20 1 August 2019 Axis Bank 8.70 17 August 2019
TENURE: 5 YEARS
Lakshmi Vilas Bank 7.85 14,751 Allahabad Bank 8.25 14 August 2019 IOB 8.70 10 August 2019
AU Small Finance Bank 7.77 14,693
Syndicate Bank 8.30 12 AUGUST 2019 Kotak Mahindra Bank 8.80 16 August 2019
DCB Bank 7.75 14,678
RBL Bank 7.50 14,499
Top banks for 1 year Top banks for 5 years
BANK NAME MCLR (%) WITH EFFECT FROM BANK NAME MCLR (%) WITH EFFECT FROM
Top five senior citizen bank FDs State Bank Of India 8.25 10 August 2019 Karur Vysya Bank 9.55 7 August 2019
Interest rate (%) What `10,000
TENURE: 1 YEAR compounded qtrly will grow to Central Bank Of India 8.30 15 August 2019 City Union Bank 9.95 6 August 2018
Lakshmi Vilas Bank 8.35 10,862
Punjab National Bank 8.30 1 August 2019
RBL Bank 8.20 10,846 Syndicate Bank 8.35 12 August 2019
Bandhan Bank 8.10 10,835 FOR ANY CHANGES IN MCLR RATES,
Allahabad Bank 8.40 14 August 2019 PLEASE E-MAIL US AT ETIGDB@TIMESGROUP.COM
Indusind Bank 8.00 10,824
TENURE: 2 YEARS
Lakshmi Vilas Bank 8.45 11,820
Your EMI for a loan of `1 lakh
AU Small Finance Bank 8.37 11,802 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
RBL Bank 8.25 11,774
@ 8% 2,028 1,213 956 836 772
TENURE: 3 YEARS
@ 10% 2,125 1,322 1,075 965 909
DCB Bank 8.50 12,870
AU Small Finance Bank 8.50 12,870 @ 12% 2,224 1,435 1,200 1,101 1,053
Lakshmi Vilas Bank 8.45 12,851 @ 15% 2,379 1,613 1,400 1,317 1,281
FIGURES ARE IN `. USE THIS CALCULATOR TO CHECK YOUR LOAN AFFORDABILITY.
IDFC First Bank 8.00 12,682 FOR EXAMPLE, A `5 LAKH LOAN AT 12% FOR 10 YEARS WILL TRANSLATE INTO AN EMI OF `1,435 X 5 = `7,175
TENURE: 5 YEARS
Lakshmi Vilas Bank 8.45 15,191 Post office deposits Interest (%)
Minimum
invt. (`)
Maximum investment (`) Features
Tax
benefits
AU Small Finance Bank 8.27 15,057 Senior Citizens' Savings Scheme 8.6 1,000 15 lakh 5-year tenure, minimum age 60 80C
DCB Bank 8.25 15,043 Sukanya Samriddhi Yojana 8.4 250 1.5 lakh per year One account per girl child 80C
RBL Bank 8.00 14,859
Public Provident Fund 7.9 500 1.5 lakh per year 15-year tenure, tax-free returns 80C
Top five tax-saving bank FDs 5-year NSC VIII Issue 7.9 100 No limit No TDS 80C
Interest What `10,000 Time deposit 6.9-7.7 200 No limit Available in 1, 2, 3, 5 years 80C#
TENURE: 5 YEARS AND ABOVE rate (%) will grow to
Lakshmi Vilas Bank 7.85 14,751 Post Office Monthly Income Single 4.5 lakh 5-year tenure, monthly returns Nil
7.6 1,500
AU Small Finance Bank 7.77 14,693 Scheme Joint 9 lakh 5-year tenure, monthly returns Nil
DCB Bank 7.75 14,678
Kisan Vikas Patra 7.6 1,000 No limit Can be encashed after 2.5 years Nil
Recurring deposits 7.2 10 No limit 5-year tenure Nil
Savings account 4.0 20 No limit `10,000 interest tax free Nil
ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP
(ETIGDATABASE@TIMESGROUP.COM) Data as on 14 Aug 2019 # Benefit available only for 5-year deposit
pick of the week
Coal India: At attractive valuations

Despite other negatives, analysts are getting bullish due to the stock’s cheap valuations.
T
he Coal India counter has been going downhill for ing the quarter zoomed by 22% y-o-y. Ebitda stands for earn-
several years now and its price is quoting close to ings before interest, tax, depreciation and amortisations.
Fundamentals
all-time lows. On an absolute basis, its share price Coal India’s efforts of keeping costs under control by shut- CONSENSUS
ACTUAL
ESTIMATE
crashed 48% over the past five years, compared ting down old mines and increasing productivity at mines
2017-18 2018-19 2019-20 2020-21
to the Sensex gaining 39% during the same time. that are under operations are also yielding results.
Revenue (` cr) 81,081 92,896 1,02,021 1,06,804
Uncontrolled stock supply by the government, in the form of Analysts are getting bullish on this counter now mostly
divestments, is the main reason for this disaster. because of its attractive valuations. For example, its en- Ebitda (` cr) 6,214 21,537 18,988 19,679
The recent deep cut, however, was because of the govern- terprise value / Ebitda ratio is now placed around 3 times, Net profit (` cr) 7,038 17,461 17,124 17,777
ment’s decision to allow 100% foreign direct investment significantly lower than its historical average of around 7 EPS (`) 11.34 28.14 27.73 28.80
(FDI) in coal mining and related ac- times. Similarly, other valuation
tivities. As of now, FDI coal mining ratios like PE, PB etc are also lower Valuations PBV PE
DIVIDEND
YIELD (%)
is allowed only for captive mining
for power projects and Coal India
Analysts’ views than its averages. More important-
ly, its dividend yield of around 7%
Coal India Ltd. 8.32 6.36 6.96
Vedanta Ltd. 0.65 7.33 13.88
is the only commercial coal miner. 2 23 is comparable to that of interest of-
NMDC Ltd 0.94 5.02 6.94
That means this increased competi- Sell Buy fered by many bank fixed deposits.
KIOCL 3.97 60.05 1.04
tion will have a long-term negative With a cash pile of around `31,000
MOIL Ltd. 1.06 7.25 4.73
impact on Coal India. Analysts, crore—around 25% of its market
however, say its impact will be lim-
ited on Coal India due to several
4 capitalisation, Coal India is also
maintaining high dividend rates.
Latest brokerage calls TARGET
Hold RECO DATE RESEARCH HOUSE ADVICE PRICE (`)
reasons. First, there will be a three
to five years gestation period before Select ion Methodolog y: We 29 Aug 19 J.P. Morgan Overweight 255
coal production starts because of pick up the stock that has shown 16 Aug 19 JM Fin Inst Securities Buy 340
the lengthy procedures involved for maximum increase in “consensus 16 Aug 19 IIFL Buy 301
coal licence allocation, land acquisi- analyst rating” during the last 1 16 Aug 19 Kotak Securities Buy 290
tion, environment clearances, etc. month. Consensus rating is ar- 13 Aug 19 Jefferies Buy 275
Second, it will aim to restrict coal Despite reporting flat volumes, Coal India’s net profits rived at by averaging all analyst
imports, which jumped by 40% dur-
were higher than street expectations. This coupled with
attractive valuations make the company a
recommendations after attribut- Relative performance 65.84
ing the past one year. ing weights to each of them (ie 5 1
100 MARKET PRICE: `189 SENSEX
favourite of analysts. 95.73
While Coal India continues to re- for strong buy, 4 for buy, 3 for hold,
port good numbers in other param- 2 for sell and 1 for strong sell) and
eters, it disappointed on volumes. For example, its sales vol- any improvement in consensus analyst rating indicates that
ume during the first quarter of 2019-20 remained nearly flat the analysts are getting more bullish on the stock. To make
y-o-y and was down 6% q-o-q. However, Coal India is taking sure that we pick only companies with decent analyst cover-
steps to improve coal production and analysts are expecting age, this search will be restricted to stocks with at least 10
a small annualised volume growth of around 4% between analysts covering it. You can see similar consensus analyst 59.67
2018-19 and 2020-21. Despite the stagnant volume growth, its rating changes during the last one week in ETW 50 table. 29 AUG 2018 ET METAL COAL INDIA 29 AUG 2019
Ebitda and net profit were higher than street expectations —Narendra Nathan Coal India compared with ET Metal and Sensex. Stock price and index values
due to better realisations in coal price and its net profit dur- normalised to a base of 100. Source: ETIG and Bloomberg.
WHAT EXPERTS ADVISE

BUY *STOCK PRICES AS ON 29 AUGUST
RESEARCH STOCK 1-YEAR TARGET POTENTIAL

STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) UPSIDE (%)
Operating margins improved in first quarter due to fall in raw material prices. Positive on SHK in
SH Kelkar Anand Rathi Buy 130 243 87 medium to longer term basis because volatility witnessed in 2018-19 is seen subsiding in 2019-20.
Upgraded to buy because of higher valuation for Reliance Retail, expected value unlocking from
Reliance Industries Elara Capital Buy 1,242 1,713 38 JioFiber and higher profit because of oil-to-chemicals expansions.
Current pessimism unwarranted. With valuations below historical average, risk-reward ratio is
SBI Jefferies Buy 275 370 35 attractive. SBI is expected to grow its market share, but at lower net interest margin (NIM).
Recently completed Arysta acquisition builds on UPL’s core strength as a post-patent player with
UPL J P Morgan Overweight 558 700 25 their complementary crop protection portfolio and market presence supporting revenue growth.
Decision of few restaurants to opt out of aggregator platforms like Zomato (Info Edge’s subsidiary)
Info Edge J M Financial Buy 2,001 2,500 25 is unlikely to impact valuation and recent correction in price provides a good buying opportunity.
Sanofi's power brands continue to grow. Sanofi is also a cash-rich company and has seen its core
Sanofi India ICICI Direct Buy 5,978 7,500 25 retun on equity (RoE) improving from 15.4% in 2014 to 23.4% in 2018.
SELL RESEARCH STOCK 1-YEAR TARGET POTENTIAL

STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) DOWNSIDE (%)
Profitability of Dish TV in first quarter was impacted by higher selling costs and taxes. 'Reduce'
Dish TV Geojit Fin Services Reduce 22 21 6 rating given due to weak quarterly numbers and uncertain outlook around new tariff regime.

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S P E C I A L I S S U E Small

THE ECONOMIC TIMES measures,

ET WEALTH MORNINGSTAR RANKING OF

investors. But fund

Financial services 37.47% HDFC Bank Ltd 8.93%

PROFILE TOP SECTOR BETS TOP STOCK PICKS

L Financial Services 42.23% Kotak Mahindra Bank 9.46%

bone of his approach. But

ing moats, particularly in

Financial Services 31.48% State Bank of India 8.40%

Sailesh believes that even a small

Raj Bhan 5-Year asset

PROFILE TOP SECTOR BETS TOP STOCK PICKS

Neelesh Surana `1,197 cr Kotak Mutual Fund

TOP SECTOR BETS TOP STOCK PICKS

FUNDS MANAGED ANNUALISED

FUND NAME AUM (`CR) 3-YEAR 5-YEAR

Mirae Asset Emerging

A Mirae Asset Emerging Bluechip—un-

My portfolio is aligned for

current market environment. We are

2 Financial Services 41.02% 9.19% enjoy favourable pricing power.

FUND NAME AUM (`CR) 3-YEAR 5-YEAR

Axis Long Term Equity 18,953 9.62 12.92

PROFILE QUICK TAKE

B ting shorter and compa-

Gopani 5-year asset

Harsha the consumption theme

Kotak Mutual Fund `12,492 cr and maintain a healthy

How large sized funds have fared

Principal Emerging Bluechip

Shah B Com, ACA

MID & SMALL CAP FUNDS

Devalkar Financial Services 24.73% Info Edge (India) 6.17%

FUND MANAGED ANNUALISED

Axis Midcap 2,634 9.73 11.62

that are doing well has come down

S spadework is needed while navigating the

caps were rallying Consumer Cyclical 20.62% JK Cement Ltd 4.61%

R. spread out the portfolio to

Srinivasan file. He prefers companies

Basic Materials PI Industries Ltd

Kotak Mutual Fund `2,445 cr in the superior downside

PROFILE TOP SECTOR BETS TOP STOCK PICKS

Financial Services HDFC Bank Ltd

ill a few years ago,

T the very high quality

Kotak Mahindra Bank

L&T Mutual Fund

`3,496 cr 0.54 phasis on bringing con-

How we ranked the managers

Small measures, big impact

Be a 'least risky' borrower for banks

Hike EMI nominally when interest rates go up

Tricks we need to help

mysteries exhorting people to do the right thing is

set. The attempt to change the psychology

Take the SIP route to direct

Arbitrage funds are not riskier,

Not for short-term investors

To keep away short-term players, most

Invest in line AMIT & SNEHA, 35 & 30 YEARS, SALARIED, BENGALURU

with goals How to invest for goals