Sanjay Sinha, Head of Equity SBI Mutual Fund has been one of the most outstanding fund managers. He joined the fund in November 2005 as a Head of Equity with direct responsibility for Magnum MultiCap Fund, Magnum Contra Fund, Magnum Emerging Businesses Fund, Magnum Equity Fund and Magnum Global Fund. He also co-manages a host of other funds including sector funds. Sinha is an alumnus of IIM Calcutta and has been in the fund industry since 1989mainly with UTI Mutual Fund for over 1" />
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Smart money’ or institutional investors create significant moves in the market. Institutional interest can take a stock far beyond its true value while lack of institutional interest can mean a sluggish stock price. The big boys of institutional investing are foreign institutional investors (FIIs) but information on their portfolios is not easily available. Meanwhile, domestic mutual funds are also emerging as important players. What they buy is of interest, although sometimes the herd-like action of funds converging on the same set of stocks leads to poor subsequent performance. Mutual fund portfolios show the direction in which the fund managers are thinking and what their preferences are. At the end of the year, it shows the kind of stocks they hope will do well next year. So, for what it is worth, here is a portfolio analysis of the 10 best-performing equity diversified growth schemes on a one-year basis.
One stock that finds a place in the top 10 holdings of almost all schemes, except two, was Jaiprakash Associates. What is so great about this company that funds are falling over themselves to have it in their portfolios? It offers multiple plays: it is in engineering and construction, cement, hydropower, expressways and highways, hotels and golf resorts -- each of them is part of a red-hot sector. Engineering companies have been performing well, not only on the back of a robust domestic market, but also buoyant overseas order flows. Hence, interest in these stocks is high. Larsen & Toubro, for instance, finds a place in the top 10 holdings of five funds followed by BHEL, which was present in four funds -- as was Bharti Tele.
Infrastructure, real estate and construction are some of the hottest sectors at present. Stocks from these sectors are high on the radar of mutual funds. Two stocks, Ansal Properties and IVRCL Infrastructure, were there in three of the top 10 funds. Simplex Infrastructure, Hindustan Construction and Patel Engineering too figured sparsely.
There were 12 companies which found a place in the top 10 holdings of at least two of the top performing funds. Among these are Century Textiles, Crompton Greaves, Grasim, GACL, Kesoram, Reliance Communication, Reliance Industries, Unitech and Zee. Among the odd stocks, which deserve attention for the institutional interest they are attracting, are Divi’s Laboratories, Deccan Chronicle, Dishman Pharmaceuticals, Havell’s and Emami.
Though software is a perennially top performing sector, Wipro, Satyam and Infosys hardly figure in the top 10 holdings of the top 10 funds. However, TCS was a part of the top portfolio of at least two. Among other notable stocks that have seen dwindling institutional interest are Tata Steel, Tata Motors and ICICI Bank. Once the darling of the market, HLL, appeared in the top 10 holdings of just one fund.