Should I invest in Canara Robeco Equity Diversified fund ?

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About Canara Robeco Mutual Fund

Canara Robeco Mutual Fund is a joint venture between the Canara Bank and Robeco Group. Canara Bank is one of the largest state-owned banks in India, over 113 years of banking experience & Robeco group was founded in 1929 in Rotterdam, is a pure play asset manager with a presence in 15 countries and over 873 employees. Robeco group has key investment centres located in Rotterdam, Zurich, Boston, Chicago, Hong Kong and Mumbai.

The AUM % of the fund house of the total Mutual fund in India over the years –

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
0.6% 0.5% 1.0% 1.2% 1.1% 1% 1.1% 0.7% 0.6% 0.6% 0.5% 0.5% 0.6% 0.7%  
Market share of company (% of total industry AUM)

About Canara Robeco Equity Diversified fund Growth

The fund is currently 95% invested in equities of which 63.07% is in large cap stocks, 17.83% is in mid cap stocks, 4.94% in small cap stocks & ₹1775 cr. AUM. This is a multi-cap fund where the fund management team has complete freedom to invest in companies of different sizes, depending upon where it expects maximum gains. This versatility makes multi cap funds most suitable for equity fund investors as the job of stock selection is completely left to the fund manager, which is the very idea of investing in this mutual fund.

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It is suitable for investors with investment horizon of more than 5 years, but one has to be prepared for ups and downs in the investment value along the way. If one has high risk tolerance than one can vouch for it.

A ₹10,000 investment 5 years ago would now be worth ₹14,083 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹73,773 (As on 15 July, 2020).


Investment Philosophy

The fund aims to provide an investment opportunity in Indian companies with sustainable business models based on “Top Down” as well as “Bottom Up” research approach. Market Cap agnostic fund focused on large caps with few high conviction mid-cap and small cap ideas.

The fund has prescribed portfolio allocation which is as follows –

  1. Equity & Equity Related Instruments – 65% to 100% (Risk- High)
  2. Debt and money- market instruments – 0% to 35% (Risk- Low to medium)
  3. REIT’s / INVIT’s – 0% to 10% (Risk- Medium to High)

Also read Is Mirae Asset Large Cap Fund a buy?


Fund Manager

Miyush Gandhi

Education: Mr. Gandhi is Bachelor of Commerce & Master of Business Administration

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Experience: Prior to joining Canara Robeco Mutual Fund he has worked with SBI Life Insurance Company Ltd. as Fund Manager and Research Analyst.

Other funds managed: Canara Robeco Emerging Equities Fund, Canara Robeco Conservative Hybrid Fund, Canara Robeco Infrastructure Fund.

Shridatta Bhandwaldar

Education: Mr. Bhandwaldar is a BE (Mechanical) and MMS (Finance).

Experience: Prior to joining Canara Robeco Mutual Fund he was associated with SBI Pension Funds Pvt. Ltd. (Jul 2012-Jun 2016) as Head-Research, Heritage India Advisory Pvt. Ltd. (Oct 2009-Jun 2012) as Senior Equity Analyst, Motilal Oswal Securities (Jan 2008-Sep 2009) and MF Global Securities (Apr 2006-Dec 2008).

Other funds Managed: Canara Robeco Bluechip Equity fund, Canara Robeco Equity Hybrid Fund, Canara Robeco Infrastructure Fund, Canara Robeco Consumer Trends Fund, Canara Robeco Emerging Equities Fund, Canara Robeco Equity Tax Saver Fund, Canara Robeco Small Cap Fund


Returns

One-time investment return (absolute)

Period (Returns (in %) 1 Year 3 Year 5 Year 10 Year
Canara Robeco Equity Diversified Fund 1.24% 19.37% 40.83%
PGIM India Diversified Equity Fund 6.67% 15.34% 43.10%
Kotak Standard Multicap Fund -7.36% 4.34% 39.78% 189.18%
SBI Magnum Multicap Fund -10.70% 0.04% 31.27% 141.83%
(SOURCE – moneycontrol, As on 15 July,2020)
(SOURCE – valueresearch)

SIP Returns (absolute)

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Period (Returns (in %) 1 Year 3 Year 5 Year 10 Year
Canara Robeco Equity Diversified Fund 2.65% 7.11% 22.96%
PGIM India Diversified Equity Fund 10.06% 11.11% 24.30%
Kotak Standard Multicap Fund -1.70% -1.08% 12.93% 79.80%
SBI Magnum Multicap Fund -5.09% -5.81% 6.32% 67.48%
(SOURCE – moneycontrol, As on 15 July,2020)

Portfolio Allocation

Top Holdings

Name Sector % Assets
HDFC Bank Ltd. Financial 7%
Reliance Industries Ltd. Energy 7%
Infosys Ltd. Financial 5%
ICICI Bank Ltd. Technology 5%
Bharti Airtel Ltd. Communication 4%
Hindustan Unilever Ltd. FMCG 4%
Kotak Mahindra Bank Ltd. Healthcare 3%
Tata Consultancy Services Ltd. Financial 3%
Housing Development Finance Corporation Ltd. Technology 2%
Divi’s Laboratories Ltd. Healthcare 2%
(SOURCE – moneycontrol)
Concentration & Valuation
No. of Stocks 52
Top 5 Stock Weight 28%
Top 10 Stock Weight 43%
Top 3 Sector Weight 47%
Portfolio P/B Ratio 4
Portfolio P/E Ratio 28
(SOURCE – valueresearch)

Expense Ratio Comparison

  Expense ratio (Regular) Expense ratio (Direct)
Canara Robeco Equity Diversified Fund 2.28% 0.82%
PGIM India Diversified Equity Fund 2.52% 0.54%
Kotak Standard Multicap Fund 1.64% 0.72%
SBI Magnum Multicap Fund 2.01% 0.99%
(SOURCE – valueresearch)

The expense ratio of the fund is comparable levels with other funds except for Kotak standard Multicap fund which has the lowest expense ratio.

Risk Elements

  • The firm invests in mid-cap & small-cap stocks which might have to be liquidated at lowest price during downturn & pay a premium for the stocks during the upturn which might cause higher volatility then one anticipated.
  • The firm has discretion over investing % of funds in cash & debt securities upto 35% which might be problematic if the fund is at 35% in cash & equity market keeps on rising.

Should I invest in Canara Robeco Diversified Equity Fund?

The answer depends on risk appetite. For an average investor it can a good choice from a diversification but it should be kept in mind before investing in this fund given that your time horizon should is more than 4-5 years as investment in multi-cap requires medium to long term horizon & want an multi-cap fund which is focused only on Indian equities.

Similar Mutual Funds

PGIM India Diversified Equity Fund

The fund has 93.97% investment in Indian stocks of which 43.5% is in large cap stocks, 22.48% is in mid cap stocks, 18.27% in small cap stocks. The fund is managed by Mr. Aniruddha Naha who holds an MFC degree. Prior to joining PGIM India he has worked with IDFC AMC, Naha Fund Management & Control, an offshore advisory for Mirae AMC and DSP Mutual Fund.

A ₹10,000 investment 5 years ago would now be worth ₹13,298 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹71,147 (As on 15 July, 2020).

Kotak Standard Multicap Fund

The fund has 90.89% investment in Indian stocks of which 62.8% is in large cap stocks, 21.52% is in mid cap stocks, 1.55% in small cap stocks. The fund is managed by Mr. Harsha Upadhyaya, who is a B.E (Mechanical) from NIT Suratkal, PGDM from IIM Lucknow and CFA from the CFA Institute, USA. Prior to joining Kotak Mutual fund, he has worked with DSP Mutual Fund and UTI AMC.

A ₹10,000 investment 5 years ago would now be worth ₹13,978 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹67,760 (As on 15 July, 2020).

SBI Magnum Multicap Fund

The fund has 97.62% investment in Indian stocks of which 67.26% is in large cap stocks, 9.9% is in mid cap stocks, 11.34% in small cap stocks. The fund is managed by Mr. Anup Upadhyay who is a B. tech (Hons) degree and PGDM. Also prior to joining SBI AMC he has worked with SBI Mutual Fund and Tata Consultancy Services.

A ₹10,000 investment 5 years ago would now be worth ₹13127 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹63,794 (As on 15 July, 2020).



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Prateek Goel
Co-founder of Investeek, Prateek has been investing in the stock markets since 2006 and has beaten the NSE/BSE on a consistent basis. At the age of 24, he was also featured in India Today for his expert insight on gold trading.
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