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Stock Analysis, IPO, Mutual Funds, Bonds & More

SBI Equity Hybrid Fund: Fund review

Among balanced schemes, SBI Equity Hybrid is the top performer thanks to its conservative approach.

, ET Bureau|
Updated: Oct 01, 2019, 10.06 AM IST
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risk factor
The markets have given a thumbs-up to the recent favourable change in the corporate tax rate. But for a large number of market veterans and savvy investors a key concern still remains. Would it revive demand across sectors which can improve sentiment in markets materially? There is no clear answer to this.

Unfavourable developments — both globally and domestically — have made it difficult to pinpoint the exact reason for the slowdown in demand. After the pace of Chinese consumption slowed down, the US-China tariff war and high crude prices emerged as global worries. This together with lack of visible signs of earnings’ growth closer home complicates the whole strategy of investing in safe and profitable asset classes.

To deal with these factors, it is important to follow the conservative strategy of investing in balanced schemes — the idea of seeking out best bets in both equities and debt markets.

Among balanced schemes, SBI Equity Hybrid is the top performer thanks to its conservative approach. The scheme’s fund managers Dinesh Ahuja and R Srinivasan have constructed a large cap-focused portfolio with safe government bonds and AAA-rated instruments. In the past five-year and ten-year periods, it has given 11 per cent and 12 per cent returns while its peers have given returns of 8.4 per cent and 10.5 per cent in the same period, respectively.

Portfolio change (Past 6 months)

New Entrants Complete Exits Increase in Allocation
Aani Portz and SEZ Muthoot Finance HDFC
Alkem Laboratories ICICi Securities Hero MotoCorp
Power Grid Corporation Maruti Suzuki India Shree Cement

Returns (in %)
Period CAGR Return SIP CAGR Return Aggressive Hybrid Fund-Average CAGR Return (%)
1 Year 12.14 7.45 4.46
3 Year 9.66 8.29 6.12
5 Year 11.06 9.62 7.78

Returns peer comparison (in %)
Scheme Name 1-Year 3-Year 5-Year
Canara Robeco Equity Hybrid Fund 8.25 8.60 10.18
DSP Equity & Bond fund 13.35 8.08 11.06
ICICI Prudential Equity & Debt Fund 2.47 7.38 9.59
Source: Accord Fintech, Complied by ETIG Database

Expert take
Rupesh Bhansali, Head, Mutual Funds, GEPL Capital
This scheme is a distinguished performer. Close to 87 per cent of the scheme's investments are in large sized companies and high quality debt instruments. It is the scheme's AUM size which provides it a strong edge over peers. Conservative investors who expect stability or moderately high returns can invest in it with investment period of three to five years.

Also Read

Kotak World Gold Fund: Fund review

Kotak World Gold Fund: Fund review

Axis Focused 25 Fund: Fund review

SBI Small Cap Fund: Fund review

Kotak Emerging Equity Scheme: Fund review

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