Fund's objective is long-term capital appreciation
It led the benchmark and the category with significant margins across other trailing periods
Launched in October 2000, Principal Multi-Cap Fund invests across large, mid and small-cap stocks. The fund featured in the top 30 percentile in the multi-cap funds' category of CRISIL Mutual Fund Rankings (CMFR) for three quarters ended September 2018.
P V K Mohan has been managing the fund since September 2010. He is head - equity at Principal AMC with 25 years of experience. Siddarth Mohta is the associate fund manager with over nine years of experience.
The fund's month-end assets under management (AUM) more than doubled from Rs 370 crore in November 2015 to Rs 798 crore in October 2018. Its investment objective is to achieve long-term capital appreciation.
Trailing returns
The fund has outperformed the benchmark (Nifty 500 TRI) in all the trailing periods except one year. It outperformed the peers (funds ranked under the multi-cap category in CMFR - September 2018) across all trailing periods under analysis except for one year and 10 years with marginal underperformance in the latter. It led the benchmark and the category with significant margins across other trailing periods.
SIP returns
A monthly investment of Rs 10,000 via a systematic investment plan (SIP) for 10 years would have grown to Rs 25.76 lakh (XIRR 14.64%). A similar investment in the benchmark would have grown to Rs 22.68 lakh (XIRR 12.26%).
Risk-reward matrix
The fund delivered higher average daily returns over the past three years relative to peers coupled with higher volatility. The fund's average annualised daily returns during this period was 13.3% with volatility (standard deviation) of 14.7% compared with 12.3% returns and 13.0% volatility for benchmark and 10.3% returns and 13.4% volatility for peers.
Portfolio analysis
In the past three years, banks had the highest average allocation of 20.26% in the fund portfolio followed by the consumer non-durables (10.42%) and software sectors (7.14%). HDFC Bank and ICICI Bank have been the key contributors from the banking sector while ITC Ltd and Britannia Industries have been the top contributors from the consumer non-durables sector during the period under analysis. Stocks like Reliance Industries, Bajaj Electricals and Phillips Carbon Black have also consistently outperformed the benchmark index and have been key contributors.
Out of 115 stocks the fund invested in during the three years, it consistently held 30. Of these 15 stocks have outperformed the benchmark over the three-year period.