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SBI Focused Equity Fund: Fund review

SBI Focused Equity is a distinguished performer especially over the long term. Close to 63% of the scheme’s portfolio is invested in blue-chip and large-sized companies.

, ET Bureau|
Last Updated: Feb 26, 2020, 11.30 AM IST
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The spread of the coronavirus to Europe and the Middle East comes as a big jolt to global markets, which is likely to engulf Indian markets as well. In such times of heightened uncertainty, it is prudent to stay with equity schemes that invest in companies across market capitalisations. This is because a diversified portfolio helps contain the fall in returns as compared to schemes that run concentrated portfolios.

Among such schemes, SBI Focused Equity is a distinguished performer especially over the long term. Close to 63% of the scheme’s portfolio is invested in blue-chip and large-sized companies. A large number of companies in the portfolio derive a high share of their revenues from domestic markets. In the present situation, this is an advantage given that the impact of coronavirus on global markets is yet to be fully gauged.

In addition, the scheme has performed well in almost all market cycles especially in the longer term. Presently, the scheme holds 12% of funds in cash. This provides the scheme’s fund manager R Srinivasan the money to invest in well-placed large-and-mid-sized companies during times of market slump.

In the past five-year and ten-year periods, the scheme has returned 11.5% and 17.4% returns, respectively, while its peers have given average return of 7.8% and 11.8% returns, respectively over the same periods.

ET Bureau
sbi

Expert Take
Rupesh Bhansali,
Head-mutual funds, GEPL Capital
This scheme is one of the most consistent performers in the category. Presently, 33% of the portfolio is in financial services with 12% in cash. The scheme has companies that have high dependence on domestic markets. This is a wise step on the part of fund manager Srinivasan. Retail investors with a horizon of at least five years can consider the scheme.

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