Investing in equity markets is not as easy as it looks, investors go through bad phases before reaching to the best outcome. The same is happening with L&T Equity Fund. The fund has delivered many benchmark-beating performances in the past, but currently, it is going through its bad days. The fund and its strategies have been researched by the financial analysts of MySIPonline, to help the investors generate wealth, and the details of which have been provided below:
Fund Overview
Launched in the year 2004, L&T Equity Fund (G) is an open-ended scheme, which invests across the market caps. A multi-cap category fund has an AUM of 2,689 Cr as on Jun 30, 2018, with an expense ratio of 2.01%. The fund’s portfolio significantly comprises equity and equity-related securities with 98% of it. The secondary investment of the fund is in debt instruments, to maintain the limited required liquidity.
The average market capitalisation of the fund is Rs 69,658.30 Cr as on Aug 1, 2018. This capital is invested 52.39% in giant companies, 19.13% in large-cap companies, 21.35% in mid-cap, and 7.13% in small-cap companies. The fund is biased towards large-caps as they have positive growth.
Currently, it is investing in 64 companies from various sectors which majorly include finance and banking, construction, technology, services, FMCG, engineering sector, etc. The top five companies have 25.82% of total assets which are HDFC Bank, Larsen and Toubro, HDFC, IndusInd Bank, and Kotak Mahindra Bank.
Past Performance Analysis
L&T Equity has delivered the returns of 17.55% since its launch. The highest annualised returns of the fund were in the year 2009 with 86.14%. The fund has generated negative alpha on the basis of the past three years, which is -1.55%, as provided on 30 June 2018 by the financial experts of MySIPonline.
The compounded returns of the fund for the past three, five, and seven years were 9.77%, 18.99%, and 13.38%, respectively. The fund has outperformed its benchmark, S&P BSE 500 TRI Index in the five and seven years compounded returns. However, it has underperformed the category’s average in all the years’ compounded returns.
The annualised returns of the fund for the year 2014 were 50.27%, 0.29% in 2015, 3.58% in 2016, and 34.19% in 2017. It has underperformed its benchmark in the past two years. Though, the fund has the capability to provide good returns in the long run.
Fund Manager
L&T Equity Fund Growth has been co-managed by Mr. S N Lahiri and Mr. Karan Desai. Mr. Lahiri has been associated with the fund since 2012. He is the Chief Investment Officer of equities in the L&T Mutual Fund. His convictions of taking a risk in companies with a strong background, high growth make it distinct from other fund managers. He follows the bottom-up approach of investment, keeping the growth companies in its portfolio.
Mr. Desai has been looking after the foreign investments of the fund. He has been associated with the fund since 2017. Both the fund managers use to invest in approximately 60 to 70 companies most of the time, with considerable diversification which helps them to gain profits.
The NAV of L&T Equity Fund G is Rs 84.748 as on Aug 1, 2018. The investors who have an appetite of tolerating a moderately high-risk should invest in the fund. The ideal investment horizon in the fund for an investor looking for wealth creation is five years or more. For more information regarding the fund and investment in the mutual fund, connect with our experts at MySIPonline.
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