Edelweiss Multi-Cap Fund has outperformed its peers, benchmark

During the past three years, the fund delivered higher returns while keeping its volatility in line with that of the peers and benchmark

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Edelweiss Multi-Cap Fund has outperformed its peers, benchmark


Edelweiss Multi-Cap Fund (erstwhile Edelweiss Economic Resurgence Fund) provides an opportunity to generate long-term capital appreciation from a diversified portfolio that predominantly invests in equity across market capitalisation. The fund has been ranked in the top 30th percentile in the multi-cap fund's category of Crisil Mutual Fund Ranking (CMFR) for the past three quarters ended March 2019. Harshad Patwardhan, chief investment officer for equity at the fund house, has over 24 years of experience in the investment management function. He manages four open-ended equity schemes at the company with assets under management (AUM) of Rs 1,815 crore as of April 2019. 

The fund's month-end AUM almost quadrupled from Rs 78 crore in May 2016 to Rs 306 crore in April 2019.

Trailing returns

The fund outperformed its peers (the multi-cap fund's category in CMFR March 2019) and the benchmark (Nifty 500 TRI) across all the trailing periods. Its three-year return was 15.22%, compared with the benchmark's 13.87% and the peer group's 11.92%.

An investment of Rs 10,000 in the fund on February 3, 2015 (since inception) would have grown to Rs 14,891 (9.61% CAGR) on June 6, 2019, versus the benchmark's Rs 14,335 (8.65% CAGR) and the category's Rs 13,715 (7.55% CAGR).

SIP returns

A monthly investment of Rs 10,000 through a systematic investment plan (SIP) for three years since July 2016 would have grown to Rs 4.20 lakh (XIRR 10.72%) on June 6, 2019. A similar investment in the benchmark would have grown to Rs 4.15 lakh (XIRR 9.98%).

Risk-reward matrix

During the past three years, the fund delivered higher returns while keeping its volatility in line with that of the peers and benchmark.

Portfolio analysis 

Given the multi-cap strategy of the fund, the fund manager managed the portfolio dynamically across market capitalisation. Post change in attributes in April 2018, the fund's allocation to large caps ranged between 35.68% and 63.09%, while in mid-cap stocks, it ranged from 20.04% to 26.93% and small-cap stocks from 1.49% to 21.72%. As of April 2019, the fund's exposure to large-cap stocks stood at 56.05%, mid-caps at 20.33% and small-caps at 19.42%. 

On average, the fund invested in 55 stocks per month across 28 sectors during the past three years, of which major contributors included banks, industrial capital goods, and cement.

The fund invested in overall 155 stocks in the past three years and held eight stocks consistently with an average exposure of 23.1%. HDFC Bank and ICICI Bank have been the top contributors to the fund's performance among the consistently held stocks. Reliance Industries and Bajaj Finance were other key contributors in the portfolio and have consistently outperformed the benchmark. The fund manager entered and exited stocks such as Vakrangee, Dalmia Bharat, KNR Constructions and V-Guard Industries at the right time, wherein they made handsome returns and contributed to the fund's alpha, and exited before the decline in stock prices.

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