Review of “L&T India Prudence Fund”
Technically these are Hybrid- Equity Oriented Fund but popularly known as Balanced Funds. Balanced Funds offers Best of Both world i.e. Equity & Debt. Equity aims for the growth and stability of debt. When it comes to your investments, finding the desired balance between returns and safety is what matters. Balanced funds are named after the investment strategy they follow; they also provide balance to the worried mind of investor.
While equities offer comparatively higher returns, this is usually coupled with higher volatility. On the other hand, allocation in debt offers a strong safety net, but growth is slower. These types of funds look like a balance of returns with a certain amount of RISK control.
However, the BEST advantage of this category of fund is- AUTOMATICALLY ASSETS RE BALANCING. As volatile market in last few years or say decade or since 2008 market crash, this strategy has worked quite great.
It should be kept in mind that these funds don’t offer 50:50 ratio of Equity & Debt but they have minimum 65% Equity & maximum 35% Debt!! This is so because Indian Tax Laws are in favour of higher equity allocations and any Long Term Capital Gains from Equity Mutual Funds are exempt. Long Term for taxation purpose means any equity mutual fund held for more than 1 year. This has worked fine with most of funds and these have delivered a decent return with moderate Risk & Returns.
So was this fund able to deliver what it promised?
L&T India fund is a promising offer in this category as it has Disciplined Asset Allocation approach. It has Flexible equity investment approach helps capitalise on opportunities across the market spectrum. Active management of the debt portion of the portfolio with a view to generate steady returns over time has been the specialty of this fund. This fund has proved track record of +3 years.
This fund is suitable for goal-based financial planning. L&T AMC is also known for its well-researched investments decision making which is backed by a strong team to identify potential companies with strong fundamentals and disciplined research. This fund has No sector, Cap bias instead it Invests in companies across sectors and market capitalisations.
This fund is relatively newcomer is other funds in this pedigree are on an average more than decade old funds. Equity markets have made a very strong bull rally post budget but with volatility. Also the Corporate Earnings have not made any steep rise. So market should be volatile and could enter bear run with any bad news. So funds like L&T India Prudence Fund plays the role of providing Equity Returns with Lower Volatility & Risk. With its limited track record it has performed across market cycles — in the 2012 and 2014 rallies and the lacklustre market of 2013 and 2015. Over one, three and five-years, it has beaten its category average by 3-5 percentage points.
This fund is recommended to any investor which wants to invest for long terms, loves equity return but hates volatility.
Details of funds is here under:
DETAILS OF FUND
AMC: L&T Investment Management Limited
Registrar: Computer Age Management Services Ltd. (CAMS)
Fund Category: Hybrid-Equity Oriented
Benchmark: 70% S&P BSE 200 Index | 30% CRISIL Short Term Bond Fund Index
Assets: ₹ 2,361 Crores (as on 31.07.2016)
Plan: Regular & Open Ended
NAV: ₹21.518 (G) & ₹ 11.49 (D) (as on 09.08.2016)
Soumendra Nath Lahiri (since Nov’12)
Abhijeet Dakshikar (since Jun’13)
Shriram Ramanathan (since May’16)
To seek to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities and to generate reasonable returns through a portfolio of debt and money market instruments.
- 65-75% in equity and equity-related securities
- 25-35% in debt and money market instruments (including investments in securitized debt)
|Minimum Investments: ₹ 5,000||Minimum Additional Investments: ₹ 1,000|
|Minimum SIP amount: ₹ 500||Minimum No. of SIP: 6 (monthly) or 4(Quarterly)|
|SIP Top up available.||Dates available for SIP: 1st, 5th, 10th, 15th, 20th, 25th, All six dates|
|Exit Load: For redemption within 1 year: 1% of applicable NAV||For redemption beyond 1 year: NIL|
Equity Holding Breakup
|No. of Stocks: 68||Top 10 Holdings: 30.33%|
|Portfolio P/B Ratio: 2.98||Portfolio P/e Ratio: 22.99|
This fund has around 39% exposure to Top-5 sectors with maximum exposure to Banking.
|Period||L&T India Prudence Fund||Benchmark||S&P BSE Sensex|
Compounded Annualized Growth Rate (CAGR) Since Inception
|Period||L&T India Prudence Fund||Benchmark||S&P BSE Sensex|
|CAGR Returns (%)||14.51||8.96||7.76|
|Point to Point (PTP) Returns in INR show the value of ₹ 10,000 invested||20,426||15,889||14,969|
Point to Point Return
Point to Point (PTP) Returns in INR show the value of ₹ 10,000 invested since invested.
A Systematic Investment Plan (SIP), is the most popular & effective method of investing money in mutual funds. By this method one invests a fixed amount of money, automatically at periodic intervals.
The amount of investment can start with as low as Rs 500 and one can choose different periods varying from –Weekly, monthly or Quarterly as available in this scheme.
Most popular intervals chosen by 95% of the investors is monthly investing. This is an easy way to Maximize Wealth with small regular contributions, on a long term, which is incidentally our goal. Our Goal us Maximization of your Wealth.
|L&T India Prudence Fund||1 Year||3 Year||5 Year||Since Inception|
|Total amount invested (₹)||1,20,000||3,60,000||6,00,000||6,60,000|
|Current Value (₹)||1,31,231||4,78,194||9,78,367||11,04,981|
|Scheme Returns (%)||18.00||19.42||19.69||18.75|
|Total Value of Benchmark||1,30,690||4,31,149||8,17,135||9,12,999|
|Benchmark Returns (%)||17.13||12.12||12.34||11.74|
This article is for information purpose. This has not to be considered as investment advisory. Please contact your financial investment adviser before investment. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISK. PLEASE READ THE SCHEME RELATED OFFER DOCUMENT BEFORE INVESTING.
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